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INTEGRATED

ANNUAL REPORT

2013

We are pleased to present to stakeholders the

Sun International Group’s Integrated Annual

Report for the year ended 30 June 2013.

The objective of this report is to provide

stakeholders with an appropriately balanced

view of the Group’s strategy, performance, sustainability and

governance, to inform their decision-making on the Group’s

ability to continue creating value over the short, medium and

long term.

The scope of this report includes all Sun International’s

subsidiaries and operating units. Our local and

international operations include 27 resorts,

luxury hotels and casinos across eight

countries.

The Integrated Annual Report is

prepared in accordance with the JSE

Limited Listings Requirements and the

South African Companies Act, No. 71

of 2008. A register of our application of

the King III governance principles is

available on our online Integrated Annual

Report. Financial information presented in

this report follows International Financial

Reporting Standards (IFRS). This report satisfies

the requirements of the Global Reporting Initiative

(GRI) G3 guidelines at a B+ level.

This year we took into consideration the International Integrated

Reporting Council’s Consultation Draft of the International

Integrated Reporting Framework in preparing this report. We

support the framework’s guiding principles, and will continue

to consider these and other local and international best

reporting practice in the preparation of future reports.

This report contains certain forward-looking statements which

reflect the Group’s assumptions and expectations going

forward. Stakeholders are advised not to place undue reliance

on these statements, as they are subject to change in accordance

with macroeconomic or operational developments.

As an international leisure group, we contribute directly to the

economies of the countries in which we operate. This contribution

includes investments and the paying of rates, taxes, levies, fees,

as well as salaries, wages and local procurement. We also

contribute at a local level through training and development

programmes for our employees, and provide benefits that

positively impact their families and communities. Our awareness

of our responsibilities to all our stakeholders finds expression

not only in our business performance and the application of our

business ethics but also in our efforts to help create sustainable

societies around us.

We have continued to make good progress in embedding

sustainability and governance-related reporting systems and

processes in our international operations; however,

not all properties outside South Africa are covered

equally comprehensively. Improving systems

and processes in our international operations

will continue to be emphasised given our

refocused international strategy.

The Chief Executive and Management

report, which runs from page 18 to 53,

presents financial, operational and

sustainability-related information in

the context of the Group’s strategy. This

year we have structured the management

report according to the Group’s five strategic

focus areas, which reflect the board and

management’s thinking on how best to manage the

business. This section also introduces Q&As with some

members of the executive management team, who take

over the narrative from the Chief Executive on issues most

material to the Group and its stakeholders, for which they

have management responsibility.

Given this commitment to providing stakeholders with more

focused, concise and meaningful reporting, we have again

made greater use of our online Integrated Annual Report.

Information available online only is indicated in the contents

page opposite. Notably, this year we have only provided Group

financial statements in this report, with the Company financial

statements available online. We welcome stakeholders’ feedback

on our reporting, which can be sent to

[email protected]

This icon indicates where to find additional information in the respective sections of our online Integrated Annual Report.

This icon indicates where to find related information in this report.

HOW TO READ OUR INTEGRATED REPORT:

ABOUT THIS

report

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Supporting content onlineIn addition to the content of this report, our online Integrated

Annual Report for 2013 contains supporting content and

disclosures for the reporting period.

The information detailed below can be found in the respective

sections of our online Integrated Annual Report, available at

http://ir.suninternational.com

Overview

Chairman’s report

Governance

Annual financial statements

Shareholder information

CONTENTS

About this report..................................... ifc

Highlights and salient features................. 02

The Sun International journey................... 04

Group portfolio........................................ 06

Vision, mission and strategic intent.......... 10

Directorate.............................................. 12

Sun International Group........................... 82

Shareholder information.......................... 142

Introduction...................................... 18

Financial overview.............................. 20

Our approach to our business............ 26

Strategic focus areas:

Improve our existing operations and guest experience

28

Protect and leverage our existing asset portfolio

34

Grow our business into new areas and products

38

Our people 42

Governance and sustainability 46

Outlook............................................. 52

Chairman’s report.................................... 14

Corporate governance review.................. 54

Remuneration report................................ 64

Report of the social and ethics committee 78

Shareholders’ analysis............................. 80

Key statistics– Casino

– Rooms

Seven year financial review

Gaming industry overview Most Valued Guest loyalty programmeCustomer managementInformation technology

Occupational health and safetyHuman resourcesTransformation

Environment reportSocial and economic development projects

Corporate governance reportKing III application registerIndependent assurance sustainability statementGlobal Reporting Initiative tableBoard and committee charters– Board

– Remuneration committee

– Social and ethics committee

– Nomination committee

– Risk committee

– Investment committee

– Audit committee

Sun International Company

Chief Executive and Management report

2 Sun International Integrated Annual Report 2013

Highlights and salient features

R million 2013 2012 2011 2010 2009

TRADINGRevenue 10 267 9 494 8 651 7 797 7 915

Gaming 8 195 7 645 6 981 6 212 6 234

Rooms 957 838 744 757 809

Food and beverage and other 1 115 1 011 926 828 872

Revenue (US$ million) 1 031 954 869 783 795

EBITDA 2 936 2 642 2 555 2 533 2 746

EBITDA (US$ million) 295 265 257 254 276

EBITDA margin (%) 28.6% 27.8% 29.5% 32.5% 34.7%

Non-South African share of EBITDA (%) 17% 14% 11% 8% 6%

Adjusted headline earnings 740 616 512 506 600

ORDINARY SHARE PERFORMANCEDiluted adjusted headline earnings per share (cents) 715 606 504 501 618

Dividends per share (cents) 265 240 200 100 –

Share price at 30 June (R) 95.61 89.35 91.60 82.50 76.34

Market capitalisation at 30 June 9 903 9 197 9 210 8 295 7 579

Market capitalisation at 30 June (US$ million) 995 924 925 833 761

CASH FLOW, BORROWINGS AND FINANCIAL RATIOSFree cash flow 1 258 1 147 990 672 825

Borrowings (excl. employee share trusts) 6 431 6 449 5 695 6 065 6 359

Borrowings to EBITDA 2.2 2.4 2.2 2.4 2.3

EBITDA to interest 6.4 5.4 5.4 4.7 4.0

INVESTING ACTIVITIESCapital expenditure

Expansion 557 586 201 354 984

Replacement 711 514 695 677 492

Acquisitions of minority interests 73 817 – 34 22

New business acquisitions – – – 56 189

TAXES PAIDLevies and VAT on casino revenues 1 917 1 774 1 583 1 364 1 353

Corporate taxes 497 502 521 452 622

Employees’ taxes 308 271 246 210 217

EMPLOYEES AND TRANSFORMATIONNumber of employees 11 049 10 866 10 897 10 738 10 005

Black employees (%) 86.0% 85.0% 84.2% 83.5% 82.5%

Black employee representation in senior management (%) 43.4% 42.7% 42.5% 35.6% 31.1%

Employee remuneration 1 902 1 799 1 522 1 387 1 266

B-BBEE score 88.8 90.1 84.5 72.3 69.2

US$ translated at the 30 June 2013 exchange rate of US$1: R9.96

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Launched EarthGlow, which integrates Sun International’s social and environmental initiatives

Level 2 B-BBEE contributor status maintained

Sun International was re-included on the JSE SRI index in November 2012

PEOPLE

GOVERNANCE AND SUSTAINABILITY

GROWTH

New gaming opportunities secured

in Panamaand Colombia

Opened

Boardwalkand Maslow hotels on time and

within budget

LEVERAGE EXISTING ASSETS

Applied to move

Morula licence

Self-funding redevelopment plans for

Sun City

Revised our performance management process to align it more directly to the strategic focus areas, the deliverables of which have been cascaded down into the business and linked to specific roles

BLACK OWNERSHIP AT

86%Number of black employees

33%

SOME OF OUR AWARDS

Zambia Environmental Management AgencyThe Green Award 2013

Travel + Leisure – World’s Best Awards

Tripadvisor Certificate of ExcellenceThe Royal Livingstone Hotel

The Zambezi Sun

Federal Palace Hotel and CasinoBest casino in Nigeria

2013 certificate of excellence winner

BoardwalkDiamond Awards for conference/convention centres and for

casino and entertainment centres

Sun City PalaceTraveller’s Choice winner 2013 for Tripadvisor


1970 1974

2001 2000

1966

Royal Swazi

Maseru Sun

Ezulwini Sun

Zambezi Sun and Royal Livingstone

1979

2004 20062005

2002Opened Meropa Casino Leisure and Entertainment World during March 2002. Opened Flamingo during

March 2002

Sibaya CasinoGolden Valley

SUN INTERNATIONAL

the

19 99Carnival City

1969

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Acquired Windhoek’s most luxurious hotel which was rebranded

under the Sun International brand and became the Kalahari Sands Hotel

1991

1983

1990

1994

1981

1997

1984Sun International listed on the Johannesburg

Stock ExchangeWild Coast Sun

today

’89

2008Monticello Refurbished

Federal Palace opened

Boardwalk Hotel opened in December 2012 and

Maslow opened in January 2013

The Palace of the Lost City

opened on the 1st of December, coinciding with

the Miss World pageant

Cascades Hotel

Lesotho Sun

Gaborone Sun

Morula Casino and Hotel

Fish River Sun

Naledi Sun

2009


Group portfolioGROUP CONTRIBUTION

Economicinterest No of rooms No of slots No of tables

GAMING MARKET SHARENUMBER OF GAMING

LICENCES REVENUE EBITDA

2013 2012Sun

International Total 2013 2012 2013 2012

Gauteng459 2 268 71 7 13% 13% 12% 13%

Carnival City 92% 105 1 758 59 15.5% 16.2% 1 10% 11% 11% 11%

Morula 100% 73 510 12 3.5% 4.0% 1 3% 2% 1% 2%

Maslow 100% 281 – – – – – –

Western Cape 466 2 744 81 . 5 21% 22% 29% 29%

GrandWest 71% 39 2 524 75 78.1% 78.1% 1 18% 19% 27% 28%

Table Bay 71% 329 – – 2% 2% 1% –

Worcester 69% 98 220 6 5.3% 5.7% 1 1% 1% 1% 1%

KwaZulu-Natal154 1 212 48 5 10% 10% 12% 13%

Sibaya 61% 154 1 212 48 35.3% 35.7% 1 10% 10% 12% 13%

Limpopo– 402 17 3 3% 3% 4% 4%

Meropa 68% – 402 17 80.1% 79.9% 1 3% 3% 4% 4%

North West1 392 1 238 50 4 16% 16% 8% 7%

Sun City 100% 1 301 548 31 47.0% 47.0% 1 13% 13% 6% 5%

Carousel 100% 91 690 19 33.5% 33.4% 1 3% 3% 2% 2%

Northern Cape– 288 11 3 1% 2% 1% 2%

Flamingo 74% – 288 11 84.4% 85.1% 1 1% 2% 1% 2%

Eastern Cape604 1 391 41 5 9% 8% 7% 6%

Boardwalk 80% 126 941 25 26.4% 25.3% 1 5% 5% 5% 6%

Fish River 80% 82 – – – – – -1%

Wild Coast Sun 70% 396 450 16 44.3% 45.5% 1 4% 3% 2% 1%

Free State30 497 18 4 3% 3% 3% 3%

Windmill 70% – 347 18 55.1% 54.9% 1 3% 3% 3% 3%

Naledi Sun 100% 30 150 – 4.7% 5.0% 1 – – – –

Management activities(excluding intergroup)

– 1% 7% 9%Sun International Management Limited 100% – 1% 6% 8%

Manco 50% – 83% – – 1% 1%

Total 3 105 10 040 337 41.7% 42.6% 13 36* 76% 78% 83% 86%

South African businesses

* There are four licences in Mpumalanga, which brings the total licences to 40 for the country

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GROUP CONTRIBUTION




2013 2012Sun


Gauteng459 2 268 71 7 13% 13% 12% 13%

Carnival City 92% 105 1 758 59 15.5% 16.2% 1 10% 11% 11% 11%

Morula 100% 73 510 12 3.5% 4.0% 1 3% 2% 1% 2%

Maslow 100% 281 – – – – – –

Western Cape 466 2 744 81 . 5 21% 22% 29% 29%

GrandWest 71% 39 2 524 75 78.1% 78.1% 1 18% 19% 27% 28%

Table Bay 71% 329 – – 2% 2% 1% –

Worcester 69% 98 220 6 5.3% 5.7% 1 1% 1% 1% 1%

KwaZulu-Natal154 1 212 48 5 10% 10% 12% 13%

Sibaya 61% 154 1 212 48 35.3% 35.7% 1 10% 10% 12% 13%

Limpopo– 402 17 3 3% 3% 4% 4%

Meropa 68% – 402 17 80.1% 79.9% 1 3% 3% 4% 4%

North West1 392 1 238 50 4 16% 16% 8% 7%

Sun City 100% 1 301 548 31 47.0% 47.0% 1 13% 13% 6% 5%

Carousel 100% 91 690 19 33.5% 33.4% 1 3% 3% 2% 2%

Northern Cape– 288 11 3 1% 2% 1% 2%

Flamingo 74% – 288 11 84.4% 85.1% 1 1% 2% 1% 2%

Eastern Cape604 1 391 41 5 9% 8% 7% 6%

Boardwalk 80% 126 941 25 26.4% 25.3% 1 5% 5% 5% 6%

Fish River 80% 82 – – – – – -1%

Wild Coast Sun 70% 396 450 16 44.3% 45.5% 1 4% 3% 2% 1%

Free State30 497 18 4 3% 3% 3% 3%

Windmill 70% – 347 18 55.1% 54.9% 1 3% 3% 3% 3%

Naledi Sun 100% 30 150 – 4.7% 5.0% 1 – – – –

Management activities(excluding intergroup)

– 1% 7% 9%Sun International Management Limited 100% – 1% 6% 8%

Manco 50% – 83% – – 1% 1%

Total 3 105 10 040 337 41.7% 42.6% 13 36* 76% 78% 83% 86%

C C

C C

C C

C C

C C

C

C

C

19.0% 20.2%

83.4% 83.8%

35.3% 35.7%

79.9%80.1%

80.5% 80.4%

84,4% 85,1%

70.7% 70.8%

59.8% 55.9%


Colombia

Panama

Group portfolio continued

GROUP CONTRIBUTION




2013 2012Sun


BotswanaGaborone Sun 80% 196 320 10 12 2% 2% 2% 2%

LesothoLesotho Sun and Maseru Sun 47% 263 121 8 # # 1 1% 1% 1% 1%

NamibiaKalahari Sands 100% 173 132 10 4 1% 1% 1% –

SwazilandRoyal Swazi and Ezulwini Sun 51% 351 152 11 *** *** 2 1% 1% – –

ZambiaThe Royal Livingstone

and Zambezi Sun

100% 385 – – – – – – *** 2% 2% 1% 1%

NigeriaFederal Palace 49% 146 142 8 1# 2% 2% 1% –

Total 1 514 867 47 8 20 9% 9% 6% 4%

GROUP CONTRIBUTION




2013 2012Sun


Latam

Chile – Monticello** 44% 155 1 982 82 66.9% 69.1% 1 2 15% 13% 11% 10%

Panama**** 600 32 – – – – – – – –

Colombia**** 310 16 – – – – – – – –

Total 155 2 892 130 1 2 15% 13% 11% 10%

International

** The gaming licences and market share is for the Santiago Metropolitan Region*** No information is available

**** Panama and Colombia casinos are expected to open in 2014# Only legally operating casino in the country

Other African businesses

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GROUP CONTRIBUTION




2013 2012Sun


BotswanaGaborone Sun 80% 196 320 10 12 2% 2% 2% 2%

LesothoLesotho Sun and Maseru Sun 47% 263 121 8 # # 1 1% 1% 1% 1%

NamibiaKalahari Sands 100% 173 132 10 4 1% 1% 1% –

SwazilandRoyal Swazi and Ezulwini Sun 51% 351 152 11 *** *** 2 1% 1% – –

ZambiaThe Royal Livingstone

and Zambezi Sun

100% 385 – – – – – – *** 2% 2% 1% 1%

NigeriaFederal Palace 49% 146 142 8 1# 2% 2% 1% –

Total 1 514 867 47 8 20 9% 9% 6% 4%

C CC C

C

C

C

C

GROUP CONTRIBUTION




2013 2012Sun


Latam

Chile – Monticello** 44% 155 1 982 82 66.9% 69.1% 1 2 15% 13% 11% 10%

Panama**** 600 32 – – – – – – – –

Colombia**** 310 16 – – – – – – – –

Total 155 2 892 130 1 2 15% 13% 11% 10%

46.5% 45.9%

100.0% 100.0%

54.0% 54.0%


To be one of the most admired companies listed

in South Africa and to be an example for

others to follow.

Vision

others to follow.others to follow.others to follow.others to follow.others to follow.others to follow.others to follow.others to follow.others to follow.others to follow.

Sun International invests in and manages businesses in the hotel, resort and gaming industries.

We are specifically focused on the development, management and operation of hotels, resorts and casinos in South Africa, other parts of Africa, Latin America and other

international markets where we have a competitive advantage.

We will continue to position ourselves to take advantage of opportunities where we can achieve a strong market position, benefitting both from our innovation and our depth of experience.

OUR STRATEGIC INTENT

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Mission statement

We will at all times remain mindful of our responsibilities towards our stakeholders, including the communities we serve.

Innovation, fun and an obsession with service excellence and effi ciency will make Sun International a formidable competitor and

provide our shareholders with superior returns.

We will create an environment in which all employees are well-trained, motivated and take pride in working for the Group.

We will be recognised internationally as a successful leisure Group offering superior gaming, hotel and entertainment experiences

which exceed our guests’ expectations.


DirectorateSun International Limited board

EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS

GE (Graeme) STEPHENS (50)Chief ExecutiveBCom, HDip Acc, CA(SA)

Graeme was appointed as Chief Executive and an executive director of the board with effect from 1 February 2013. Graeme joined the Company as New Business Development director in October 2011, having spent seven years with Kerzner International as the Senior Vice President of Project Development.

MV (Valli) MOOSA (56)ChairmanBSc (Mathematics, Physics)

Valli was appointed to the board in 2005 and as board Chairman on 1 July 2009.

REMINV

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A Risk committee

Remuneration committee

Social and ethics committee

Audit committee

Investment committee

IT governance committee

Nomination committee

REM N SE

R

R

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IT

For full CVs of our board of directors visit http://ir.suninternational.com/1/

DR NN (Lulu) GWAGWA (54) BA, MTRP, MSc (London), PhD (London)

Appointed to the board in 2005, Lulu holds various directorships and is the Chief Executive Officer of Lereko Investments.

KH (Kele) MAZWAI (44) Director: Group Human ResourcesBBus Admin, BCom, BCom (Hons), MBA

Kele was appointed to the board with effect from 1 September 2011. Kele joined Sun International in 2008 and has 20 years’ experience in human resources management.

AM (Anthony) LEEMING (43)Chief Financial OfficerBCom, BAcc, CA(SA)

Anthony was appointed as the Chief Financial Officer and an executive director of the board with effect from 1 March 2013. Anthony joined the Group in 1999 as Group Financial Manager and went on to become the Group’s corporate and SIML finance director in 2009.

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IN (Nigel) MATTHEWS (68) Lead Independent DirectorMA (Oxon), MBA

Nigel was appointed to the board in 1996 and as Lead Independent Director with effect from 1 July 2009.

BLM (Tumi) MAKGABO-FISKERSTRAND (39)

Appointed to the board in 2010, Tumi is founder of AfricaWorldwide Media.

INDEPENDENT NON-EXECUTIVE DIRECTORS

INV

A

B (Bridgette) MODISE (46)CIMA, BCompt (Hons), CA(SA)

Bridgette was appointed to the board in September 2011. Bridgette is the founder and non-executive chairperson of investment holding company, Kutira Capital.

PDS (Peter) BACON (67)National Diploma in Hotel Keeping and Catering, Stanford Executive Programme.

Peter was appointed as an independent non-executive director of the Company with effect from 1 February 2013. Peter has over 35 years’ experience in the hospitality, resorts and gaming industry.

LM (Louisa) MOJELA (57)BCom

Appointed to the board in 2004, Louisa is group Chief Executive of WIPHOLD of which she is a founder member.

GR (Graham) ROSENTHAL (68)CA(SA)

Appointed to the board in 2002, Graham is a retired partner of Arthur Andersen and a non-executive director of three listed companies.

PL (Leon) CAMPHER (65)BEcon

Appointed to the board in 2002, Leon has extensive experience in investment management.

ZBM (Zarina) BASSA (49) BAcc, Dip Acc, CA(SA)

Appointed to the board in 2010, Zarina comes from a financial services background, having served as an executive director at ABSA bank and a partner at Ernst & Young.

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ESPONDING TO MACROECONOMIC REALITIESI am reasonably pleased with the results achieved

by the Group, given that the global economy

remained depressed during the year, with growth forecasts

being reigned in even for the best-performing emerging

economies. The gaming industry is traditionally considered

to be counter-cyclical; however, it is apparent that the impact

of global recessionary pressure has simply been delayed. With

pressure on disposable income and source markets in the

developed world being felt across our industry, we have

developed a more nuanced understanding of the new realities

our business and industry face, and what the Group needs to

do going forward.

The Group has done extensive work to refocus its strategy

in response to prevailing conditions. In South Africa, we are

working to improve operational performance in a market

Chairman’s report

RMV (Valli) Moosa

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broadly considered to be mature. Internationally, we are

looking to the world’s emerging market regions for new

opportunities, notably Latin America given not only our

successful track record there but also its intrinsic growth

prospects, governance standards and relative stability as an

investment destination. In Africa, we have de-emphasised our

past strategy to actively seek and invest in new casino properties

given the relatively low return on effort and limited number

of suitable opportunities; however, we remain open to large

urban-based opportunities on the continent.

MATCHING LEADERSHIP CAPACITY TO STRATEGYA key activity for the board during the year was matching the

expertise and experience of the leadership team to the revised

strategy and business imperatives. Following the retirement of

Acting Chief Executive Garth Collins and the resignation of

Chief Financial Officer Rob Becker early in 2013, the board

appointed Graeme Stephens and Anthony Leeming respectively,

after patient and careful consideration. We are pleased we

were able to make these appointments internally, and we have

every confidence that Graeme and Anthony are the right

people to take the business forward in the current environment.

The recent appointment of Stuart Wing, an Australian, as Chief

Operating Officer brings a more global edge to the business.

Stuart’s experience in the very competitive Australian and

New Zealand gaming industry is especially relevant given the

importance of improving performance in our core domestic

operations. We are striving to unlock latent potential, particularly

in leveraging the Group’s hotel and resort assets to grow

gaming revenue as well as expanding into new product lines.

The board is also looking to appoint an international director in

due course, to bring this relevant perspective to the table; we

are resolute that we will not put shareholder funds at risk in

markets we do not adequately understand.

SETTING A HIGH STANDARDConducting ourselves as a responsible corporate citizen is

fundamental to the way we do business. Whereas our track

record of transparency, accountability and responsible business

conduct is expected within our highly regulated industry in

South Africa, we operate to this standard even in other markets

which may not have as robust legislation in place.

Under Graeme’s leadership the Group has also re-emphasised

ethics, setting an uncompromising tone at the highest level.

The board approved a corruption policy which takes a zero

tolerance approach to any form of bribery or corruption. The

policy has been rolled out through the organisation. Notably, in

the context of our international strategy, the Group will actively

reject any opportunities where it becomes apparent that

bribery, corruption or other unethical conduct is expected for a

transaction to proceed or licence to be granted.

Although the Group comfortably met the criteria to retain its

Level 2 broad-based black economic empowerment contributor

status, employment equity remains a tough challenge. For this

reason, we have made transformation a key component of our

management scorecards. More broadly, we recognise that

diversity is fundamental to the Group as it gives us the depth

and richness of perspectives and understanding necessary for

accessing new markets and supporting the national objectives

of the countries in which we operate.

prevailing conditions.

The Group has done extensive work

to refocus its strategy in response to


Chairman’s report continued

Stakeholder management has improved considerably since

the Group adopted a formal stakeholder engagement approach

three years ago. Through regular engagement we have

identified the top material issues for each stakeholder group,

and the board holds management accountable for managing

these issues. This approach has also ensured that the board is

sufficiently apprised of stakeholder concerns, to inform its

strategic decision-making.

The Group’s corporate environmental strategy (CES) is gaining

momentum. Although it got off to a slow start, our general

managers have been active in implementing reduction

programmes at unit level, and we look forward to these actions

reflecting in actual cost savings and a reduced environmental

footprint. Sun International’s re-inclusion in the JSE’s Socially

Responsible Investment (SRI) index is a very positive outcome of

these efforts.

Given the substantial investments the Group is making in

information technology (IT) and its critical role in achieving our

strategic objectives, the board has identified IT governance as a

key focus area in the year ahead. We are in the process of

recruiting an external IT specialist with gaming experience to

chair our IT governance committee and will appoint a non-

executive director to the committee.

APPRECIATIONThe board extends its appreciation to Garth for ably holding the

fort during his tenure as Acting Chief Executive, which gave the

organisation the breathing space to think carefully about the

kind of leadership needed to take the business forward in the

current environment. We would also like to thank Rob for his

eight years of dedicated and loyal service to the Group. We wish

both Garth and Rob well in their future endeavours.

On behalf of the board, I express our gratitude to all our

stakeholders for their continued support and belief in the

sustainability of the Sun International Group.

Our people, as always, are the foundation of our success

through their strong work ethic, endurance and commitment

to service excellence. Without their passion and unwavering

commitment to Sun International we would not be able to

achieve the results that we have nor would Sun International

be the market leader that it is today.

To my board colleagues: our successes are driven by your

support and contribution and I thank each one of you for the

valuable part you play.

With the refocusing of Sun International’s strategy and

responsibilities for the new executive leadership and their

teams clearly defined, there is a tangible sense of energy and

clarity of purpose throughout the organisation. While the

Group faces challenges in the domestic and global environment,

the board has every confidence in the management team, and

is optimistic about the future.

17

THE TABLE BAY

Cape TownThe Table Bay Hotel is the ultimate in luxury when looking for Cape Town

accommodation

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verall, the Group has delivered reasonable

results in what has been, and remains, a

challenging operating environment, in

particular for our core gaming business. After

returning a relatively strong performance in

the first half of the year, the combination of an increasingly

difficult economic environment in South Africa and the ban on

smoking in all public places in Chile impacted Group gaming

revenue considerably in the second half. The hotel and resort

side of the business has, however, shown good growth and

the weakening Rand has played a role in increasing the

number of foreign visitors to our properties.

A relatively new factor in the South African gaming industry

(which currently still represents 80% of our business) is the

growth in alternate forms of gaming outside the traditional

casinos. To counter this increasing competition for discretionary

income, we have an absolutely unique portfolio of properties

in which we have invested heavily and which deliver experiences


Chief Executive and Management report

GE (Graeme) Stephens

Introduction

The executive team has

and priorities and has developed five defined

areas.

to our guests that cannot be replicated by these alternative

gaming products. We also have a large database of our highly

loyal Most Valued Guests built up over decades, which gives us

a distinct competitive advantage.

We are still managing to – and should continue to – improve

casino revenues, but it is definitely getting tougher to grow

aggressively in our relatively mature and saturated local

markets. This reality is requiring that we ask ourselves some

searching questions, such as:

� Have we got the right management team in place?

� Can we improve the way we operate – to increase revenues

or reduce costs?

� What more can we do with our existing asset portfolio?

� Should we divest of any of our existing assets?

� Are there new products/lines of business we should be in?

� Where can we expand outside our existing markets?

During the year the Group made three new executive

appointments: myself as Chief Executive, Anthony Leeming

replaced Rob Becker as Chief Financial Officer (CFO) and Stuart

Wing has joined us in the newly created position of Chief

Operating Officer (COO). We have evaluated all senior

management positions, restructured the way in which we

operate and the responsibilities allocated to each executive/

discipline. The team is now settling down and knows what it

has to achieve.

We have interrogated and developed the various initiatives

now being pursued and grouped them into the following

strategic priorities:

� Improve our existing operations and guest experience

� Protect and leverage our existing asset portfolio

� Grow our business into new areas and products

� Our people

� Governance and sustainability

Turning to the financial results for the year to 30 June 2013,

I have been extremely fortunate to have Anthony step up as

CFO. He has been with Sun International for over 14 years,

having joined the Group in 1999 as the Group Financial

Manager and he therefore has all the relevant understanding

of both the industry and the specific financial complexities

of Sun International. He was appointed as a director of

Sun International Management Limited on 1 July 2009 with

responsibility for the Group’s corporate finance and debt

funding, and has been integrally involved in all aspects of the

Group’s financial affairs. His transition into the critical CFO role

has been absolutely seamless.

19

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REVIEW OF THE YEARThe income statement below includes headline earnings adjustments to reflect a comparable position with the prior year.

R million 2013 change 2012

Revenue 10 267 8.1% 9 494

EBITDA 2 936 11.1% 2 642

Depreciation and amortisation (851) 4.0% (818)

Property and equipment rentals (104) 44.4% (72)

Profit from operations 1 981 13.1% 1 752

Foreign exchange profits 18 (48.6%) 35

Net interest paid (430) 5.5% (455)

Profit before tax 1 569 17.8% 1 332

Tax (481) 3.0% (496)

Profit after tax 1 088 30.1% 836

Minorities (348) 58.2% (220)

Adjusted headline earnings 740 20.1% 616

n the year ended 30 June 2013 the Group achieved growth in revenue, earnings before interest, taxation, depreciation and

amortisation (EBITDA) and operating profit. Even with significant investment in expanding our asset base, refurbishing some of our

properties and ongoing asset replacement, debt levels declined marginally and the debt to EBITDA ratio improved to 2.2 times.

Diluted adjusted headline earnings per share (HEPS) increased by 18% to 715 cents and the annual gross dividend per share was

increased by 10% to 265 cents. This reflected a reduced dividend pay-out of 37% compared to 40% in the previous year. The reduction

is in light of the subdued second half trading and the number of expansion projects under consideration.


Financial overview

AM (Anthony) Leeming

Chief executive and management report continued

Revenue for the year was 8% ahead of last year at

R10.3 billion. After an encouraging start to the financial year,

trading slowed with gaming revenue from the South African

operations growing by only 3% in the second half compared to

7% in the first half. Revenue growth was further impacted by

the introduction of the smoking ban in Chile with effect from

1 March 2013. EBITDA at R2.9 billion was 11% higher than last

year, with the EBITDA margin increasing from 27.8% to 28.6%.

The increase in property and equipment rentals represents the

rental for the Maslow hotel in Sandton which opened on

7 January 2013.

The continued weakening of the Rand resulted in foreign

exchange profits of R18 million being realised compared to

R35 million in the prior year. Net interest paid of R430 million

was 6% below last year due primarily to lower interest rates.

The tax charge of R481 million declined by 3% due mainly

to the abolishment of secondary tax on companies (STC) from

1 April 2012. The effective tax rate, excluding non-deductible

preference share dividends, STC and capital gains tax (CGT),

was 28% (2012: 29%).

Adjusted headline earnings of R740 million and diluted adjusted

headline earnings per share of 715 cents per share were 20%

and 18% above last year, respectively. Excluding the impact

of foreign currency movements and STC, adjusted headline

earnings per share increased by 14%.

SEGMENTAL ANALYSISSegmental analysis by region

Revenue EBITDA EBITDA margin (%)

R million 2013 2012 2013 2012 2013 2012

South Africa 7 788 7 298 2 217 2 030 28.5 27.8

Other Africa 948 873 174 106 18.4 12.1

Latin America (Monticello) 1 498 1 270 318 262 21.2 20.6

Management activities 610 590 244 260 40.0 44.1

Total operating segments 10 844 10 031 2 953 2 658 27.2 26.5

Central office and other eliminations (577) (537) (17) (16) – –

10 267 9 494 2 936 2 642 28.6 27.8

The detailed property segmental analysis is set out on page 94 of this report.

Revenue by region and nature

Gaming Rooms Food and beverage/other Total

R million 2013 change 2012 2013 change 2012 2013 change 2012 2013 change 2012

South Africa 6 457 5% 6 144 652 17% 558 712 10% 649 7 821 6% 7 351

Other Africa 385 10% 349 303 9% 279 260 6% 245 948 9% 873

Latin America (Monticello) 1 353 17% 1 152 2 100% 1 143 22% 117 1 498 18% 1 270

8 195 7% 7 645 957 14% 838 1 115 10% 1 011 10 267 8% 9 494

21

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Sibaya’s share of the KwaZulu-Natal gaming market of 35.3%

was 0.4% lower than last year. The loss in market share is

attributed to an increase in the number of gaming positions at

a competitor’s facility.

Boardwalk revenue increased 10% to

R496 million. However, as a result of the

increased cost structure resulting from the

larger property and disruptions during

construction, EBITDA declined 3% to

R143 million and the EBITDA margin declined by 3.8%. The

new hotel and conference centre opened during December

2012 and the refurbishment of the existing gaming floor and

the ancillary facilities were completed during the year. EBITDA

in the second half of the financial year was up 7%, and we are

confident that the new facilities will result in future growth.

Sun City revenue at R1 291 million was 5% up

on last year. International room nights sold

improved by 14% while local room nights sold

declined 6%. Gaming revenue was up 3% at

R446 million. As a result of excellent cost

containment and process improvements, Sun City achieved

EBITDA growth of 45% to R168 million.

Wild Coast Sun revenue increased 26%

to R389 million and EBITDA 109% to

R67 million. Room nights sold increased

by 35% although occupancies were 6.3%

lower than last year, as a result of an

increase in rooms from 271 to 396 on completion of the

redevelopment in June 2012. The increased room inventory

assisted the Wild Coast Sun in achieving growth of 17% in

gaming revenue to R294 million.

OPERATIONAL PERFORMANCE

GrandWest revenue was 5% ahead of

last year at R1 866 million. As a result of

good cost control the EBITDA margin

improved to 42.3% and EBITDA increased

6% to R789 million. The proposed 2%

increase in gaming tax, as announced by the Western Cape

legislature in the budget speech earlier this year, was introduced

with effect from 1 September 2013.

Carnival City experienced a slowdown in

revenue in the second half of the year with

revenue declining 1% against 10% growth

in the first half of the year. For the full year

revenue was up 4% to R1 061 million

driven by 13% growth in tables revenue. Carnival City’s gaming

revenue growth is below the growth in the Gauteng gaming

market due to increased competition from electronic bingo

terminals (EBTs) and limited payout machines (LPMs) which

have proliferated in and around Ekurhuleni. Despite the below-

inflation increase in revenue, Carnival City increased its EBITDA

6% to R316 million and its EBITDA margin improved by 0.5%

to 29.8%.

The Group’s share (Carnival City and Morula) of the Gauteng

gaming market declined by 1.2% to 19.0% with both units

(and in particular Morula) negatively impacted by the

proliferation of EBT and LPM sites in their catchment areas.

Sibaya revenue and EBITDA grew 6% to R1 040 million and

R362 million respectively. The EBITDA

margin of 34.8% was 0.2% below last

year primarily due to an increase in gaming

levies from November 2012, which resulted

in an additional cost of R4.1 million.

South Africa contributed 76% (2012: 78%) of Group revenue with 83% coming from gaming. Monticello represented 15% (2012: 13%)

of Group revenue, having grown its revenue by 18% in Rand terms for the full year despite being flat in Chilean pesos.

Rooms revenue grew strongly, assisted by the opening of the Boardwalk and Maslow hotels in December 2012 and January 2013

respectively. On a comparative basis, rooms revenue was up 11% for the year. As a consequence of the increase in room supply, overall

Group occupancies declined 1.4% to 62.7% at an achieved daily rate (ADR) of R1 075, which is 6% up on last year. Actual room nights

sold increased by 7.3%. Occupancies and ADRs for key properties are set out below:

Occupancy ADR

2013 2012 2013 2012

Sun City 63.6% 64.2% R1 616 R1 525

Wild Coast Sun 78.3% 84.6% R647 R540

Table Bay 53.0% 47.5% R2 086 R1 956

Maslow 36.3% – R1 130 –

Royal Livingstone and Zambezi Sun 39.8% 42.9% R1 827 R1 647

Gaborone Sun 77.4% 78.4% R792 R727

Federal Palace 67.6% 61.3% R2 142 R2 001



The Table Bay achieved good revenue

growth on last year although occupancies

still remain low due to the oversupply of

inventory in the Cape Town market. ADR

increased as a result of higher room nights

sold in the free independent traveller (FIT) and sports and

promotion markets. Revenue of R181 million was 18% ahead

of last year resulting in EBITDA of R22 million (2012: R7 million).

The Royal Livingstone and Zambezi Sun’s revenue in local currency was 1%

down on last year while EBITDA was flat.

In Rand, revenue and EBITDA were 9%

and 14% up on last year, respectively. The

increased ADR is primarily a result of the strengthening of the

US Dollar. Excluding the impact of exchange rates, the ADR

was 0.5% higher than last year. Our properties continue to

deal with the adverse effects of the yellow fever vaccination

requirement imposed on Zambia, but not on the Zimbabwean

side of Victoria Falls where competing properties are situated.

Gaborone Sun and the other Botswana operations achieved

revenue of R178 million, 5% up on last year due primarily to

the strengthening of the Pula against the Rand. EBITDA

increased 4% to R50 million with margins decreasing slightly

to 28.1%, impacted by legal fees incurred

relating to the successful objection to the

awarding of a fourth casino licence, as

well as increased utility and marketing

costs.

In Nigeria, The Federal Palace revenue in local currency was

10% up on last year to NGN3 765 million (R198 million) with

gaming revenue up 19% to NGN1 402 million (R80 million).

Costs were exceptionally well contained

resulting in EBITDA increasing 226% to

NGN698 million (R40 million) and the

EBITDA margin increasing from 6.4% to

20.2%.

Monticello revenue, in Chilean Pesos, was

flat on last year – strong growth in the first

eight months was offset in the last four

months due to the impact of the new anti-

smoking legislation. Casino revenues in the

Santiago region grew by only 2% for the year. Monticello’s

market share was around 67% – double that of the only other

casino in the region. Two smoking decks opened during

September 2013, with another two expected to open during

October, which will make the property far more attractive to its

smoking guests and should lead to a recovery in revenues over

the medium term.

MANAGEMENT ACTIVITIES


RevenueSIML 547 3% 530

Management and licence fees 536 499

Project fees 11 31

Manco 63 5% 60

610 3% 590

EBITDASIML 195 (8%) 213

Manco 49 4% 47

244 (6%) 260

Management fees and related income of R610 million was 3%

ahead of last year. SIML project fees were R20 million down on

last year at R11 million. The lower project fees and higher

share-based payments cost (up R15 million) resulted in EBITDA

for SIML of R195 million which was 8% below last year. The

increase in share-based payments cost is attributed to the

reversal of the charge of unvested awards in the prior year. Of

the R49 million Manco EBITDA, R24 million is attributed to the

Group (2012: R24 million).

FINANCIAL POSITIONThe Group’s borrowings at 30 June 2013 of R6.7 billion are

marginally below last year. A full breakdown of the Group’s

debt by legal entity is included in the segmental analysis on

page 98. Included in the Group’s borrowings is R239 million of

preference share funding belonging to Sun International’s

empowerment partner Dinokana. Other than a R60 million

guarantee given by the Company in respect of this debt there is

no recourse to the Group and consequently for bank covenant

purposes only the guarantee is included. Cash, excluding cash

floats, increased by R236 million to R837 million of which

R634 million is attributed to Sun International.

A

REVENUE AND EBITDA

2013 2012 2011 2010 2009

10 2

67

2 93

6

9 49

4

2 64

2

8 65

1

2 55

5

7 79

7

2 53

3

7 91

5

2 74

6

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Set out below is a summary of the Group’s net debt position

and debt covenants:

R millionDebt

covenant 2013 2012

Long-term debt 3 512 4 257

Short-term debt 3 158 2 422

Less Dinokana debt (239) (230)

Group debt 6 431 6 449

Less cash (excluding cash floats) (837) (601)

Net debt 5 594 5 848

Debt ratiosDebt to EBITDA (times) <3.0 2.2 2.5

Net debt to EBITDA (times) 1.9 2.2

EBITDA to interest (times) >3.0 6.5 5.4

Additional debt capacity 2 377 1 477

All debt ratios have improved over the past year with all covenants

having been comfortably met. The increase in short-term debt

is due to the early redemption of preference shares as these

were not considered good purpose preference shares in terms

of section 8E and 8EA of the Income Tax Act. In the year ahead

the Group will be extending the maturity profile of a significant

portion of its short-term debt.

Capital expenditure incurred during the yearR million

Expansionary

Boardwalk 306

Maslow 217

Monticello* 34

557Refurbishment

Sun City 35

Royal Livingstone 19

Wild Coast Sun 6

Other 13

73Other ongoing asset replacementIT 236

Slots 217

Other 217

670

Total capital expenditure 1 300

* The Monticello expansionary capex relates to the purchase of land adjacent to the property for future expansion.

Capital commitments for 2014R million

Refurbishment Zambezi Sun 72

Carnival City 24

Sibaya 47

Sun City 23

Swaziland 21

Monticello 17Other 41

245

Other ongoing asset replacementIT 505

Slots 306

Other 386

1 197

Total capital commitments 1 442

The significant ongoing IT spend relates to R326 million for the Group’s Enterprise Gaming System (EGS) and R70 million for

the Enterprise Resource Planning (ERP) system.

Free cash flow Free cash flow generated by the Group was as follows:


Cash retained from operating activities 2 462 2 203

Interest paid (461) (492)

Replacement of PPE and computer software (743) (564)

Free cash flow 1 258 10% 1 147

Gross dividends paid

Minorities (282) (308)

Shareholders (252) (199)

724 640

Funding capacityAs set out above, at 30 June 2013 our Group debt to EBITDA was at 2.2 times which was well within our debt covenant level of 3 times. We also have over R800 million in cash reserves, so on a net debt to EBITDA basis our debt is just below 2 times covered. The growth in EBITDA and lower debt has resulted in a significant increase in the Group’s potential debt capacity to R2.4 billion.

For the new projects in Panama and Colombia, the Group has secured US$200 million in term debt facilities which have a maturity profile of between five to seven years. The debt financiers will have recourse to the Group.

Given the strong cash generation of the Group, we are comfortable with the current and anticipated financial gearing and at the current debt to EBITDA levels we have sufficient

capacity to fund the projects under consideration.



THE PALACE OF

THE LOST CITYNorth West Province

The Palace of the Lost City at Sun City is rated as one of the Leading

Hotels of the World

25

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As set out in my introduction, the executive team has critically evaluated our objectives, strategy and priorities and has developed five

defined strategic focus areas, each with its own list of key deliverables that have been agreed with the board.

Importantly, overall performance against these strategic objectives forms the basis of my performance contract as Chief Executive, and

I am accountable to the board for delivery of the agreed objectives within each focus area. In turn, I have assigned responsibility for

each objective to specific members of the executive team, now encapsulated in their performance contracts, and the executive team

Our approach to our business

Improve our existing operations and

guest experience

01Protect and

leverage our existing asset portfolio

02Grow our

business into new areas and products

03

In challenging the assumption that the markets in which we operate in are relatively mature, we are actively relooking how our business is structured and how we operate to maximise the value we can create and to improve the guest experience. Ensuring that existing and new guests keep choosing Sun International properties as their destination of choice – through offering a great experience – is core to this focus area.

We have a diverse portfolio of assets including world class five star hotels, modern and well located casinos, some of the world’s premier resorts and some older legacy assets that for various reasons may not be positioned favourably any more. In evaluating our portfolio we have identified those properties that can be better leveraged, those that need protection and those that may no longer be core to our strategy.

While we believe there is still latent growth to be had from our existing assets, to effectively grow our business we are considering other geographic areas that offer attractive opportunities for casinos. In particular we are focusing on Latin America. We are also looking at the alternative gaming market which continues to experience strong growth.

Page 34 Page 38



Our people

04

Our people are the enablerof the Group’s ability to achieve its strategic objectives. Given the highly competitive service-oriented industry we operate in, our people’s motivation and competence to perform and provide a memorable guest experienceare key determinants of the Group’s ongoing success and sustainability.

Governance andsustainability

05

As a responsible corporate citizen, the Group has developed a credible track record that underlies our corporate reputation. Governance and sustainability are fundamentalto Sun International’s operations and are interwoven into our strategy and decision-making process, from board and management level to our operations.

Page 46Page 42

has created a list of tasks for each objective and has assigned responsibility for these tasks to their respective teams. The variable

component of each executive’s remuneration package has been directly linked to the achievement of his/her agreed objectives. Through

this approach, we have created clear lines of accountability from board level down, definitively aligned to the Group’s strategy.

In the sections that follow I discuss our performance against specific priorities set for each of our strategic focus areas. Where relevant,

key members of the executive team provide their perspective on the most burning issues for the Group.

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Integrate gaming and hotel divisions

Improve marketing and sales capability

Review business procedures to achieve efficiencies

Insource key services

Insource food and beverage operations

Deliver on financial goals

Improve our existing operations

and guest experience

01Our strategic priorities in this focus area are:



Although the South African casino market is relatively mature,

with a number of established operators, we believe that we

can still improve the performance of our properties by growing

revenue into new areas, being more competitive and driving

operational efficiencies.

Historically, the Group operated within two defined silos: a

gaming division and a hotels and resorts division. After a

review of the operating environment and our strategy, the

Group has undergone a process to change our operational

structure to integrate our hotels and resorts and gaming

divisions so that they now function as one team with one

reporting line (the COO). We believe this will enable us to

leverage our unique resort property portfolio to increase

revenue (in particular gaming revenue) across all our properties.

The business is now segmented by geography:

� South Africa

� Other Africa

� Latin America

Between geographic regions we are still seeking to foster

much closer collaboration on both our approach to how we

do business and our approach to our guests. So if you’re a

Platinum Most Valued Guest (MVG) at the Federal Palace in

Nigeria, and you fancy a game of golf at Sun City, no problem!

Our General Managers at each unit are now being incentivised

at both a unit and Group level, to foster a Group-oriented

mindset.

We believe that our assets can be better leveraged as a

key competitive advantage to attract gaming guests both

domestically and also from previously untapped international

source markets.

The Group has an enviable depth of management, many of

whom have been with us for their entire careers. However, I feel

we may have started to lose our ability to see and do things

differently or innovatively. The approach to gaming and casino

operations has evolved in other regions of the world, many of

which deal with the same challenges that we now face. To

make sure we learn from their experiences, we have successfully

recruited a fresh international perspective into the business with

the appointment of Stuart Wing as COO. Stuart has extensive

global gaming experience in the Australian and New Zealand

casino industries, which from a market and regulatory

perspective are not dissimilar to South Africa. Initially contracted

as a consultant, he has now been brought onboard to assist

in driving many new initiatives that have been identified as

opportunities for improving performance.

Q A

Q: What excites you about the prospects forSun International?

Sun International really is a unique organisation – it is a globally competent casino operator but, more importantly, has an amazing portfolio of unique properties, with a diverse spread of operations, and is a premium five star hotel operator – probably number one in South Africa. And South Africa is a great country!

Q: What similarities are there between the Australian and South African gaming markets?

The Australian market is highly competitive, generally characterised by having a single casino in a town, but with a number of electronic gaming machines in the immediate area. So the challenges facing the industry are similar. The scale and product offering of casino properties in South Africa is similar to what you see in Australia, and the infrastructure is similarly sophisticated. Customer bases and their behaviours, as well as the regulatory and union framework are also similar.

Q: What initiatives can be implemented to further grow revenue in a mature market?

There are a number of programmes that can be implemented to improve penetration into existing markets. In markets where we are not the sole supplier – like Johannesburg and Durban – there is a great opportunity to become more competitive.We can leverage the intelligence we gather from,for instance, the implementation of the EGS and our Customer Relationship Management (CRM) system, to drive powerful changes in guest behaviour.

In the process of interacting with him as a consultant, and

indirectly interviewing him, I raised a number of questions with

Stuart, including:

STUART WING Chief Operating Officer

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Stuart stepped into the role of COO on 1 July 2013 following

the retirement of Garth Collins (and many, many thanks to

Garth for his enormous contribution). Since then we have been

busy implementing a number of the initiatives identified, both

by him and by the existing management team, to improve our

performance.

It is clear that the guest experience is a central thread that unites

many of our ongoing strategic initiatives. In this industry, there

is little differentiation to be had in slot or table games; instead it

is the experience we consistently offer our guests and their

families that will keep them choosing Sun International. Our

unique properties are a clear competitive differentiator that we

can better leverage to offer a great guest experience, but there

is more that can be done:

POTENTIAL TO INSOURCEHousekeeping and food and beverage are key touch points for

our guests, and it is important for the Group to ensure that

the guest experience is enhanced as far as possible in these

areas. Many of these services are currently outsourced to

service providers and we are reviewing these arrangements

and questioning whether we are optimising guest experience,

revenue generating opportunities and the wellbeing of the

employees involved. Insourcing would increase our control over

areas like service quality and training, and let us guide guest

excellence initiatives to a greater degree.

IMPROVE MARKETING AND SALES CAPABILITYWe are currently developing a new brand strategy and have

appointed a brand strategist/PR manager to augment our skills

base in this area. With an enhanced focus on attracting

gaming guests from international markets, we are repositioning

our sales teams in the key source markets of the United States,

Latin America, Middle East and Asia. We are also opening

offices in Australia and Singapore and establishing sales teams

in key African countries.

To align our marketing structures with the new operating

model, we have integrated gaming and resort marketing and

Group entertainment under one manager.

The Group’s gaming marketing ensures that all our guests

enjoy the best value-for-money gaming experience possible.

This includes ensuring that the latest and most popular

machines and games are on our casino floors, guest service is

of the highest standard, gaming promotions are innovative

and exciting, and that we provide our guests with high quality

entertainment and a comprehensive and varied range of food

and beverage facilities.

The individual property brands feature consistently in the industry

as major tourism attractions in southern Africa.

REVIEW AND REFRESH MOST VALUED GUEST OFFERINGIn the gaming industry, it generally holds true that most

revenue is generated from a small percentage of players. Our

MVG loyalty programme remains our key value offering to top

players and is available in all Group casinos, including Monticello

in Chile where it has become the benchmark. The programme

has four card tiers, each offering distinctive privileges to members

at all Sun International hotels, resorts and casinos, with

benefits becoming increasingly valuable as guests progress up

through each level. The MVG Platinum card qualifies our top-

rated MVGs for the very best rewards across the Group. This

exclusive card gives our top players the status, benefits and

recognition they deserve in acknowledgement of their

patronage. The MVG Platinum card is highly sought after by

our guests, and continues to be the best-performing sector of

our customer base.

I would argue that relative to the competition, we have a superior offering with largely irreplaceable assets – no one is going to build another Sun City. So there are plenty of opportunities for growth in the domestic market as well as for expanding our offering internationally.

Q: Are we operating efficiently in terms of structure and costs?

Given the generally higher cost of operating in both New Zealand and Australia, casino operators in that part of the world have had to get extremely efficient and there is no doubt that there is an opportunity to change the way that the Group operates to achieve efficiencies without impacting on guest experience.

Q: How about marketing and sales – is there room for improvement?

Absolutely. In hotel sales, you can argue that we have been under-represented in key growth markets – in particular Asia. As the traditional markets of Europe are not showing strong growth we should reconsider how best to approach those markets on a cost-effective basis.

To put it simply, the marketing and sales approach

needs to become more focused and the skills base

needs to be improved.

Q: And the importance of the internet as a marketing and sales channel? What should we be doing to strengthen our online presence?

The website needs to get better and more efficient, including the online booking function. The next stage is the optimisation of the properties, so that Sun International improves its ranking in search engine listings. We also need a branding exercise to improve the look and feel, as well as include further functionality.



We are researching and conceptualising the evolution of the

MVG loyalty programme to ensure it remains relevant and

creates value for the Group and our guests. We continue to

offer exclusive entertainment and gaming options across all

our properties to ensure our MVGs enjoy the benefit of being

loyal customers.

INTEGRATE OUR CUSTOMER RELATIONSHIP MANAGEMENTAND GAMING SYSTEMS The optimisation of our CRM technology is ongoing, with

specific work streams focusing on maintaining data quality,

and growing our capability in digital channels such as the web

and social media. We are also adding online capabilities to our

customer contact centre, to interact and transact with our

guests digitally.

We have identified the most appropriate system to achieve these

aims, which should be fully operational within the year ahead.

The CRM system is just one of the many IT-related initiatives that

we are busy with and that should enhance our guest experience.

In today’s gaming world the “Business” and “IT” disciplines are

converging rapidly and we require extremely close cooperation

between the two. At present we are well advanced in the

installation of the EGS which is replacing our aging in-house

developed Casino Management System. The new technology is

based on modern architecture, which enables online and mobile

capability and has been enhanced with unique features for

Sun International’s operations. We have worked with Bally

Technologies to create a cutting edge (in global terms) gaming

system utilising smart card technology that also offers Group-

wide functionality – which means that whichever of our

properties countrywide you choose to enter, your card will

instantly be recognised – and due to the “smart” card we will

immediately know your preferences – not just your points, but

being greeted with “Welcome to Sibaya – would you like the

same gin and tonic that you had at GrandWest?”.

In a casino environment the experience is about winning and

the strength of the Bally product is its advanced enterprise

bonusing options that engage and excite guests. We can also

run targeted mini jackpots and wide area progressives, where

our guests at different casinos can play against each other,

competing for the same prize.

In addition to CRM and EGS, our hotel and resort systems are

being upgraded to provide a fully integrated view of our

guests. We also plan to extend our MVG loyalty programme

across our properties – one loyalty card that is recognised and

for which points are earned, not just in gaming but in our

hotels and restaurants.

Achieving operational efficiencies in the “back of house” part

of our business is also a key component of our drive to improve

the performance of existing operations. We are introducing

an ERP system that will streamline business processes across

various functions in the Group (finance, human resources,

procurement), reducing not only systems costs but enabling us

to better monitor and manage functions such as procurement

and the utilisation of resources such as electricity.

Given all that is happening in the IT space, a man with a lot of

pressure on him is our Chief Information Officer, Thabo Ndlela.

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Q ATHABO NDLELA

Chief Information Officer

Q AQ A

Thabo has been with the Group for three years and joined at a critical time in the evolution of the IT/business interface. He is currently

managing IT-related projects with a cost of around R1 billion and so I interact with him frequently to question and make sure that all is

on track:

Q: How is the EGS implementation going? Where are we on timing and budget?

The project has been successfully been deployed at Morula, Carousel, Carnival City, Meropa and Sun City. We are very happy with not only the implementation but the way in which the operational staff and our guests have adapted to it. All South African operations will be complete by June 2014, and the system will be rolled out at Monticello in Chile during the 2015 financial year. As we move on to our larger properties, the team has benefitted from the learning curve developed over the past six months. We do not anticipate any implementation issues, we are ahead of the anticipated time frame and we are on budget.

Q: Regarding our guest experience, will EGS interact with our CRM system and what improvements can we expect?

Yes, our CRM system pulls information from EGS to support what we call a ‘single view of the customer’. For instance, the sharing of data is helping to thrill our guests with our advanced interactive guest interface. We are using smart card technology (which also helps with cash management by reducing our exposure to running cash around the casino) and our iView touch screens to deliver a host of additional features on our machines. These include targeted one-to-one communication and marketing, and loading and redeeming points.

CRM is being extended to include hotel guests while supporting campaign management and leads generation. It leverages master data management, sourcing information from across the transactional gaming, hospitality and

enterprise business applications. It pulls guest information to one place, giving us a view from room and concert bookings, to gaming preferences and entertainment interests. It will drive improvements in the analytics of our business and guest behaviour.

Q: Is it necessary to implement an ERP system and what benefits are there to be gained?

The ERP system is essentially a back-office system that will consolidate 15 systems deployed in 96 versions used across the Group. The scope includes finance, human resources, supply chain, project and document management, and areas like plant maintenance. Our goal is to fundamentally change and improve operations in these areas.

This project has a number of benefits. First off, it’s about reducing cost – we are targeting a saving of around 42% in systems costs over seven years. Bear in mind that this is just a systems cost saving – there is the additional benefit of consolidating functions throughout the Group.

Secondly, it will help us automate key business processes. There are currently a number of processes that require manual facilitation, for instance, in capturing time and attendance, scheduling shifts, and applying leave conditions. The ERP system will introduce consistent internal controls and help reduce human error.

Also, with one system you have consistent architecture, making system support simpler throughout the Group. And the system will be centralised – so we will no longer have multiple instances of applications running at different properties across the Group.

Q: Which ERP system have we chosen and how long will implementation take?

After extensive due diligence, including participation from all affected users, we have decided to go with IFS, a European-based ERP system. We have also appointed Accenture as the systems integrator. We are planning to commence implementation during the current financial year and should be complete within 24 months at a cost of R150 million.



CARNIVAL CITY

BrakpanYou are sure to be swept up into

this world of fun and festivities all wrapped up in the carnival theme

As can be seen, we are undertaking a number of initiatives in

the IT area and this is a trend that we can expect to continue as

improvements in technology continue to drive developments in

our industry. In recognition of this, and as highlighted in the

Chairman’s report, we are seeking external and independent

expertise to join our IT governance committee, to which we will

appoint an individual with relevant global gaming experience.

In summary, as I look at the operations side of the business,

there is a lot that we are doing to ensure that we continue to

show improvement in revenues, operate efficiently and enhance

our guest experience in an environment that is increasingly

competitive. I am confident that with all the steps being taken

we will maintain our position as the premier gaming company

in South Africa and further entrench our reputation as a

globally competent manager of casinos, as we seek out new

opportunities in other jurisdictions.

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Overcome effect of smoking ban in Monticello

Optimise South African and other African assets and licences (potential relocation of Morula)

Protect and leverage our existing asset

portfolio

02Our strategic priorities in this focus area are:

Protect existing licences– Secure GrandWest exclusivity

– Boardwalk expansion

Redevelopment of Sun City



The Group has a diverse portfolio of assets including world class

five star hotels, modern and well located casinos, some of the

world’s premier resorts and some older legacy assets that for

various reasons may not be positioned favourably anymore. In

the past year we have spent significant time and effort in

evaluating our asset portfolio and have identified those

properties that can be better leveraged, those that need

protection and those that may no longer be core to our strategy.

Plans to better leverage our assets include the potential

relocation of the Morula casino licence, further development

at Sun City and a potential development of unutilised land at

our property in Lagos, Nigeria.

Some of our assets under threat include GrandWest where the

Western Cape Government is considering allowing a second

casino licence to relocate to the Cape Metropole, and Monticello,

where we are dealing with the significant negative impact of

the smoking ban.

While we have a strategy that actively integrates all of our

existing properties, there are some properties that are less

strategically relevant than others. We continue to evaluate those

that are small yet require disproportionate management time,

and those that need investment to maintain standards but are

unlikely to generate sufficient incremental return on capital.

POTENTIAL RELOCATION OF MORULA The Group has submitted an application to the Gauteng Gambling Board to amend its Morula casino licence to change the description of

the licensed premises from Mabopane to Menlyn, Tshwane. In its current relatively inaccessible location, Morula is battling to compete with

the proliferation of gaming products that are targeting the underserviced Tshwane market. We believe that relocating to Menlyn will deliver

an entertainment offering not currently available to residents in the region and will also help us deliver the full potential of this licence, to

the benefit of the City of Tshwane and the Gauteng Province. Public objections to the application, which closed on 16 August 2013, have

been addressed. The Gauteng Gambling Board will schedule a public hearing and thereafter announce its decision.

If approved, the Group plans to create a new R3 billion urban entertainment destination to be known as Time Square on Menlyn Maine

in Tshwane’s eastern suburbs. The development is part of a new large-scale mixed-use “Green City” project currently under development

which, on completion, will be an R8 billion, 315 000m² precinct, of which R825 million is either already built or under construction.

The precinct will comprise a new shopping mall, a high-end residential component, an office park, hotels and an entertainment node.

The entertainment node, which Sun International plans to provide, will include a 110 room five star hotel, 8 000 seat entertainment

arena, convention and exhibition facility and a casino with 2 000 slots and 60 tables. The proposed development will create a significant

number of new jobs as well as materially higher tax revenue for the province.

THE GROUP HAS MADE AN APPLICATION

TO CREATE A NEW

R3 billionURBAN ENTERTAINMENT

DESTINATION

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SUN CITY REDEVELOPMENTSun City in the North West province is arguably Sun International’s

most unique and recognisable asset. It is, however, a capital

intensive asset that requires constant refurbishment and

upgrading to ensure it remains relevant and can attract a

significant number of guests, all with different needs and

requirements. A number of development and refurbishment

plans are in place, which will ensure that Sun City remains the

premier integrated entertainment and convention resort in

South Africa.

Importantly, the improvements to the resort will be self-funded

from Sun City’s operating cash flows and the proceeds from

the sale of a new revitalised timeshare offering.

A five year master plan has been prepared and will commence

with the refurbishment and relaunch of the original Vacation

Club – around 300 units that are in much demand and are

currently being rented on a weekly basis. The refurbishment

will bring the units up to the latest Vacation Club standards

and include modern green design elements. Interior designers

have been appointed and we are establishing an in-house sales

and marketing capability with the sales launch planned for

November 2013. Initial proceeds of the timeshare sales are

earmarked for a refurbishment of the Cabanas and an upgrade

to the property’s casino facilities, which together with the

asset’s international reputation will make Sun City a key

property in supporting the Group’s VIP gaming strategy (as

further detailed on page 41).

The intention is to position the main hotel as the adult “always

on” zone at Sun City with a focus on entertainment and food

and beverage offerings. The entertainment centre itself is

to be reconfigured to provide state-of-the-art convention and

conference facilities which will position the Group to compete

aggressively for meetings, incentives, conferences and events

(MICE) business, which will help improve occupancy rates

during weekdays.

For information on other licensing developments in the South African gaming market during the year visit http://ir.suninternational.com/2/

The Valley of the Waves will be enhanced to provide better

family and children’s entertainment, directly linked by a bridge

to the timeshare units.

GRANDWEST EXCLUSIVITYGrandWest is the only casino in the Cape Metropole and as such

has been right-sized to service this market. It has been highly

successful and today this property is the single largest contributor

to Group revenue and profit. GrandWest’s 10-year Cape

Metropole casino licence exclusivity expired in December 2010

and since then, the Group has been engaging with the Western

Cape Provincial Government on securing a further exclusivity

agreement. There is currently some debate as to whether a

second licence should be permitted to relocate from elsewhere in

the Western Cape into the Metropole. The other licences in the

province are held by a competitor (three properties) and ourselves

(Golden Valley).

Based on our extensive database of guests, derived from

12 years of operating in the region, as well as the recent low

revenue growth experienced at GrandWest, the Group believes

that there is no potential for significant additional gaming

revenue in the region to justify establishing another large

casino in the catchment area of the city.

There have been no further developments in the amendment

of regional licence allocation policy and legislation to make an

additional licence available in the Cape Metropole region

(which in itself will require a public consultation process).



BOARDWALK EXPANSIONIn 2010 the Group was successful in its bid to renew its exclusive

casino licence in Port Elizabeth, extending it by 15 years. The bid

committed to a R1 billion expansion, which has now been

concluded. The 140 room five star Boardwalk hotel, conference

centre and retail complex were all completed during the year.

The hotel opened on schedule on 14 December 2012 and has

positioned the property as a highly desirable destination in the

Eastern Cape, offering premier conferencing facilities.

OVERCOMING THE EFFECT OF THE SMOKING BAN IN MONTICELLOIn Chile, legislation that came into effect in March 2013 prohibits

smoking in public places. There is a significant correlation

between smoking and gambling and with immediate effect our

revenues at the property dropped by 20%. Remedies to limit the

impact on gaming revenues have now been implemented,

including the construction of smoking terraces outside the

building which comply with the new health regulations.

Precedent elsewhere in the world indicates that we can expect

a recovery in the medium term as smokers adapt to the new

regime. The lessons learnt in Chile will be relevant to South

Africa in the event that similar legislation is introduced here.

OTHER INITIATIVESOther projects under consideration and relating to our existing

portfolio include a refurbishment of the Zambezi Sun, a

refurbishment of the Gaborone Sun, the potential to relocate

certain other underperforming casinos and the development of

the real estate at our property in Lagos, Nigeria.

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Grow our business into new areas and products

03Actively seek opportunities in high

growth emerging markets

Expand into new product lines

Secure funding for expansion projects

Our strategic priorities in this focus area are:



As a Group we excel at two core competencies – the operation

of casinos and the operation of luxury hotels and resorts. While

the hotel business is an important facet, when one analyses

the make-up of our earnings we are clearly predominantly

driven by gaming – and going forward our hotel portfolio will

be increasingly used not just to attract its existing target

market (FIT, MICE and local tourism) but also to attract gaming

guests – either local or international. We may take on a hotel

project from time to time, such as the newly opened Maslow

which gives us a presence in Johannesburg, but as we expand

into new markets it is likely that it will be led by gaming

opportunities, and as we look at new products it is likely that

these will be gaming orientated.

With the large number of projects under consideration, we are

fortunate to have our own development department headed

by Sean Montgomery who currently has around R10 billion

of projects under consideration – some may never happen but

he plans, designs and costs them all the same. Sean and his

team have a successful and long established track record of

delivering projects on time and on budget.

NEW GEOGRAPHIC AREAS FOR EXPANSIONGiven the fact that there are no new casino licence opportunities

in South Africa, for a number of years the Group has explored

opportunities for growth outside of its home country.

Sun International will pursue new opportunities through the

acquisition or development of appropriate casino assets

typically in higher growth emerging markets within our risk

appetite and that have appropriate regulatory environments.

While we are open to possibilities in more mature markets

such as Europe and the USA, we tend to treat opportunities

that arise with a degree of scepticism by the time they reach

our attention. We have no discernible competitive edge in

these “mature” markets and it’s generally safe to assume that

by the time they have reached us, these opportunities will

already have been past a few equally competent operators

based in these regions who have turned them down for one

good reason or another.

Our real competitive advantage in securing attractive new

opportunities stems from the fact that:

� We have a genuinely global (“1st world”) competence in

both the development and operation of casinos, hotels and

resorts – but we are extremely comfortable operating in

emerging markets

� Our core business is based in an emerging market

(South Africa), which gives us a risk profile that enables us

to diversify to other emerging markets and actually reduce

our overall country risk (whereas other operators with

global competence are generally based in mature countries

and are typically more risk averse).

In looking for new casino opportunities we apply a number of

filters to assist us in reaching the correct investment decision.

These filters include:

� General country risk assessment (stability of government,

growth prospects, economic drivers etc.)

� The appropriateness of the gaming legislation in relation to

the investment we are making

� Our ability to operate in a transparent, ethical and

responsible manner

� Our competitive advantage (product/location/regulatory

protection/expertise etc.)

� Whether the opportunity can be expected to contribute a

minimum of 5% of Group EBITDA or failing which, is it of

strategic importance

� The absolute quantum of the investment. Currently, we are

comfortable that in the region of US$100 million we are not

“betting the shop” on one opportunity. Above that we

start to look for other ways of structuring the deal including

looking for partners if the opportunity is considered too

large

� The feasibility must meet the Group’s hurdle rate of

approximately 15% in US Dollars for greenfield projects.

It’s a good time to be looking for new opportunities as

recessionary pressures have had the effect of making many

countries that were traditionally opposed to the gaming

industry more receptive, given the industry’s contribution to

job creation, tourism and tax revenues.

AfricaOur brand is strong in Africa and we have over the years

expanded into our neighbouring countries, and more recently

further afield to Nigeria. While our product and expertise is in

demand on the continent there are very few gaming-led

opportunities that meet the criteria set out above. In addition

to generally weak regulatory regimes, most African countries

have their wealth concentrated in the hands of a very wealthy

few and the vast majority are extremely poor. Our gaming

business relies on reasonable volume (to eliminate volatility)

and therefore a reasonable distribution of wealth. In the

absence of this we believe that we should be bringing the

high-end players from these countries down to South Africa to

our existing properties, rather than investing large amounts in

countries where the investment case is not justified.

We have explored the possibility of a hotel-led strategy for

Africa but have concluded that we have no real competitive

advantage over the many large international hotel groups that

are now targeting the continent, and that the return on effort

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and investment is not warranted relative to other opportunities

that we have.

We remain reactive to casino opportunities of reasonable size,

particularly in large urban centres and we monitor the

fluctuating country risk of those countries where the economic

case would be compelling if there was a stable regime and

appropriate regulatory environment.

Latin AmericaDespite the current drop in revenue due to the smoking ban,

Monticello in Chile has been a success story for the Group and

has given us the track record and confidence to look for more

opportunities in the region. We have assessed the various

countries that offer gaming opportunities and at present

believe that Colombia, Panama, Peru and Uruguay have

acceptable risk profiles and regulatory environments that

warrant us exploring opportunities in these jurisdictions. In the

case of Panama and Uruguay, these are small countries that

probably only offer the potential for one meaningful property

but Chile, Colombia and Peru are large enough to support a

multi-property strategy.

We have made significant progress on a number of initiatives

in the region in the past year and as our strategy gains

momentum we can expect further opportunities to arise.

ChileWe have explored a number of potential acquisition/merger

opportunities in the Chilean gaming industry as we believe

there are opportunities for consolidation. Given the recent

decline in performance of all casinos resulting from the

smoking ban and the uncertain time frame for recovery, it is

difficult to value businesses currently but we continue to

monitor possibilities.

ColombiaThe Group is in the process of applying for a casino licence in

Colombia. Subject to receiving the licence, we have entered

into a long-term lease of the casino component in a new

mixed-use development in Cartagena. The development also

includes a 284 room five star InterContinental hotel, convention

centre, shops, theatres, apartments and offices.

We will fit-out and equip the casino with 310 slot machines

and 16 tables, at a cost of US$30 million. Planning, design and

development of the casino is on schedule. We envisage the

construction of the casino to take no longer than nine months

to complete once the gaming licence is awarded.

This opportunity provides Sun International with a low-risk

entry into Colombia’s gaming market, which presents a

number of larger, exciting opportunities.

PanamaWe have previously announced our intention to develop a

casino at the Trump Tower in Panama – an iconic development

and the tallest building in Latin America. We have spent this

year working through various regulatory issues including

rezoning certain sections of the building and applying for

a casino licence. We have now received all the approvals

necessary (including gaming licence approval) and are

concluding the acquisition on a freehold basis of the casino

component, the penthouse level (to be used as a Salon Privé)

and certain apartments in the Trump Ocean Club International

Hotel and Tower in Panama City.

The property will be developed at a cost of US$105 million and

we will offer approximately 600 slots and 32 tables, allocated

between the main casino located on the ground floor and the

Privé situated on the 66th floor overlooking the canal and city.

Development of the main gaming floor and Salon Privé will

now proceed in earnest and we can expect the property to

open early in the next financial year.

Other geographic areasAsia represents an obvious and very compelling market – so

much so that most large international gaming companies are

well represented there already and are well positioned to

compete for new opportunities that arise. We have invested a

significant amount of management time in understanding the

various regions and the basis on which we might successfully

compete. We are confident in our ability to develop and

operate in Asia, but we are generally constrained by the sheer

size of the typical opportunity that arises. The limitation of our

balance sheet in relation to other operators in that part of the

world means that we have to look to partnerships, management

contracts and opportunities that offer the casino-only

component. The establishment of a VIP gaming unit to attract

Asian players to South Africa will simultaneously give us

increased exposure to this part of the world, and with this



enhanced understanding and presence our chances of gaining

a foothold there are improved.

Outside Asia, we remain reactive to opportunities that present

themselves in jurisdictions that we are not actively focusing on.

The world increasingly seems to recognise that gaming occurs

whether regulated or not. Countries are therefore increasingly

considering legalisation and regulation, and our casino offering

is perfectly suited to the desires of most governments:

� We bring a product that offers an integrated entertainment

offering – not just gaming but also hotels, food and

beverage, live entertainment, promotions, concerts etc.

� We stimulate not just local demand but also tourism

� We are developers and invest heavily to create quality assets

that are then maintained to the highest standards

� We are responsible corporate citizens with a strong track

record in responsible gaming

� We are large employers and contribute significantly to tax

revenues.

In an industry often typified by participants that are sometimes

less than scrupulous, we offer governments and other

stakeholders an attractive, high quality and low risk alternative.

We believe that our track record, combined with our integrity

and willingness to explore and understand new markets, will

continue to generate a pipeline of new leads and projects for

the foreseeable future.

NEW PRODUCTS/LINES OF BUSINESS

LPMs/EBTs Our focus on offering our guests unique and exciting

experiences is a critical response to mitigate the impact of the

proliferation of facilities offering alternative forms of gaming

such as LPMs and EBTs. However, as this is an industry segment

that seems to be here to stay and gain traction over time, the

Group has to consider potential opportunities for entering this

market. It is a market generally characterised by fragmentation

and small participants which makes meaningful acquisitions

difficult, however, we are exploring the options available.

Sports bettingThe Group’s proposed acquisition of a sports betting company

provides us with an entry into the online sports betting space

and provides our guests with a new product offering. We

believe that the sports betting industry in South Africa is in

its infancy and offers high growth. More importantly this

acquisition provides an opportunity to gain experience in

operating in an online environment. It seems likely that in time

online gaming will be legalised in South Africa and we believe

that this business will position us well for when this happens,

both in terms of track record and also in understanding our

guests’ online preferences. The business to be acquired will be

relaunched shortly under the “Sunbet” brand. Our smart card

technology and database of gaming customers will facilitate

an entry to this segment of the gaming market.

VIP gamingThe Group is looking to target another important customer

segment – the high-roller VIP gaming guests who choose to

play in the world’s leading gaming destinations. We believe that

a number of the Group’s assets such as The Palace at Sun City,

The Table Bay (linked to GrandWest), and The Royal Livingstone

(where we have just applied for and been granted a casino

licence) match any global destination in their appeal.

Importantly, South Africa is directly connected by flights to

many destinations that have a proven propensity to enjoy

gambling – in particular Asia. We also believe that this strategy

will be appropriate to attract wealthy individuals residing in

Africa to our existing properties. As our Latin America strategy

gains traction we definitely need to understand and compete

in the established VIP market in that part of the world (in

particular Argentina and Brazil) and the properties that we

have, and are developing, are ideally suited for this as they

bring a quality of casino not traditionally available in the region.

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Create a high performance driven culture

Our people

04

Drive learning and development, talent management and leadership development

Achieve transformation goals

Improve union relationships




Our people are the key enabler of the Group’s ability to achieve

its strategic objectives. Given the highly competitive service-

oriented industry we operate in, our people’s motivation

and competence to perform and provide a memorable guest

experience are key determinants of the Group’s ongoing

success and sustainability. Whereas every industry needs their

employees to come to work, we need ours to come to work

with a smile – because that’s what our guests expect. It’s a

point that I think is often missed in the union conflict that is

becoming a feature of our business – we, more than anyone,

want our employees to be happy.

Sun International’s recent culture survey identified specific

areas to support our people’s ability to perform. Our efforts in

the year ahead will focus on improving communication, talent

and performance management, succession planning and

learning and development, which are all critical components to

ensuring we have a motivated and engaged workforce who

can lead the organisation into the future.

PERFORMANCE MANAGEMENTThe Group has revised its performance management process

to align it more directly to its strategic priorities, the deliverables

of which have been cascaded down into the business and

linked to specific roles. This has served to create greater clarity

for our people as to what the business expects of them and

what their performance will be measured against. The

transparency with which this process has been undertaken is

also supporting greater collaboration within teams.

We have also now aligned variable remuneration (short-term

and long-term) with the delivery of agreed performance

measures. Achievement of EBITDA (both unit and Group)

remains the key driver of performance measurement but we

have also introduced a component directly linked to achieving

individual objectives.

TALENT MANAGEMENTTalent management in the Group is actively informed by the

performance management process, as it allows us to identify

and address difficulties our people may be having in their roles.

It also enables us to identify top performers for career

development within the Group and to create and target

appropriate learning and development interventions.

We have dedicated a significant amount of executive time to

identifying talent in the organisation and have introduced

career discussions across the Group, providing us with insight

into our people’s ambitions and giving them more control of

their careers in the Group. This year we conducted career

discussions with our top 200 employees, who in turn were

individually evaluated by the executive team. We will be

extending this intervention down through the business. Line

managers have been trained to have these discussions with

their employees.

LEADERSHIP DEVELOPMENT AND SUCCESSION PLANNINGThe career discussions we have held with our top 200

employees, followed by the individual evaluation by the

executive team, have allowed us to identify the top tier of

people for leadership development. Our target is to have a

successor in place for at least 70% of the top key roles in the

Group. Our learning and development initiatives have been

refocused to create a talent pool from which we can fill key

management positions from within, with a particular focus on

transformation imperatives.

LEARNING AND DEVELOPMENTLearning and development interventions are a core component

of our talent management programme, as it provides

opportunities for career and skills development in the Group.

Within our properties, these interventions also support an

improved guest experience.

An important part of learning and development in the Group

is mandatory or compliance-related training, which ensures

that our people remain up to date with the latest regulatory

and legislative developments.

Number of training interventions in the year:

Training beneficiaries:

2012: 8 011

Beneficiaries7 045

2012: 76%

Beneficiaries as % of headcount

73%

2012: 50%

Females as % of beneficiaries

51%

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In addition to the more formal training programmes, we are

also implementing initiatives that will see some of our top

young performers go on “exchange” programmes with other

international casino operators, who in turn can send their

trainees to us.

TRANSFORMATIONThe Group’s recruitment, talent and succession management

strategies have been reviewed in line with our transformation

objectives. Current roles and career plans consider the

Department of Trade and Industry (dti) codes and our internal

targets to ensure they help the organisation become more

representative.

While Sun International is making good progress and has

retained its Level 2 B-BBEE contributor status, we acknowledge

that more needs to be done to transform our organisation.

Currently we do not have enough depth of black talent in key

positions that we can transit to management and leadership

roles. As developing internal talent alone will take too long

from a transformation perspective, the Group is also on a drive

to recruit talent into the organisation. We are looking at talent

that is suitable to groom and transit into key positions to

deliver on our transformation agenda.

We value and actively promote diversity, and our Group values

form the basis for guiding positive interactions between our

employees.

UNION RELATIONSHIPSWe have a recognition agreement with the South African

Commercial, Catering and Allied Workers Union (SACCAWU)

in our South African operations. All non-managerial employees

are included in the bargaining unit, which currently constitutes

60.1% of our total employee base – an increase of 0.1% on

last year. In terms of the agreement with SACCAWU, all

organisational changes are referred for consultation and Sun

International strictly conforms to the requirements of the

Labour Relations Act.

The core objective of our employee relations is to create

values-driven partnerships with organised labour organisations,

improve employee engagement and embed a democratic

employee relations culture. Working with the union, we

resolve as many issues as possible at the central level. At unit

level, we encourage our general managers and human

resources (HR) managers to build solid relationships and deal

with matters as and when they arise, to ensure continuity in

business. Line managers have also received specific training in

engaging with unions and dealing with union matters.

We invest considerable time and effort in engaging with

unions, keeping them up to date on developments and

consulting on changes that have an impact on employees.

With over 60% of our South African workforce unionised, the

union is a key stakeholder in supporting new initiatives and

helping us drive communication to employees, increasingly in

the area of change management.

Our union relationships are usually stable and positive but we

are currently experiencing some difficulties with wage

negotiations and unlawful strike action. We continue to

comply with all requirements of the law governing the rules of

engagement and expect the same from the unions. Where

unlawful action is undertaken we will protect our rights on a

non-discriminatory basis. In the year ahead we will continue

fair, open and constructive relations with all our unions in all

countries we operate in.

We have a group of highly dedicated people in our HR

department, headed by Kele Mazwai. Given the importance and

media profile of any labour-related action, as well as the efforts

we are putting into ensuring that our organisational structures

are relevant and efficient, I spend a lot of time with Kele. She is

generally unflappable, tough, fair and knowledgeable. We are

lucky to have her navigate us through these times and she has

been quick to answer my queries on some of the key issues we

are dealing with.

OUR TRANSFORMATION OBJECTIVES

for 2013Delivering on the dti Codes of Good

Practice and other legislative obligations

Ensuring that the governance, coordination and structural basics

are in place

Addressing key inequalities in the Group’s employee profile

Eliminating discrimination

Ensuring that all employees understand and support transformation



Q AQ: I know you have been keen to implement performance management for some time – are you now happy with the changes we have implemented and what benefits can we expect?

I am delighted that the focus areas and objectives for the Company have been made clear upfront – our people can now see a direct link between the initiatives being driven across the Group and the deliverables to board. Also, as the management team is now aware of the objectives, there is greater collaboration across the organisation on achieving them. People are accountable not only to their manager, but also to their colleagues.

It has been a welcome change, as our people now understand what the other areas are doing and why – and our executives have collectively had input into determining what we wish to achieve.

I am excited that the organisation now has a transparent performance management process which ensures that the whole organisation is driving the same deliverables. We are also involving the unions and getting their buy-in by discussing the deliverables with them and getting their input and cooperation in helping members understand them. They have responded very well to the strong focus on our people as part of the strategic priorities of the Group.

Q: It’s disappointing that we don’t have more qualified black management waiting to take advantage of the opportunities that are opening up. Are you satisfied that we are doing everything possible to address this?

Performance is a key driver in business. In actively managing performance you can identify where an employee is struggling, and put in place directed talent management initiatives to support them. The performance management process we have recently implemented also

helps us identify the top performers and provide specific interventions to encourage their ongoing development, particularly that of our black employees.

Now that we have completed career discussions with the top 200 employees, we are looking at the next tier to see how we can help them progress and develop a pipeline of talent that provides the requisite depth in leadership. I am confident that we are well on track to develop an appropriate succession plan.

Q: A culture survey performed last year indicated that we have some unhappiness relating to certain issues.I think we have taken many steps to address these – what else can be done?

The survey highlighted a sense that communication is not clear, with resultant confusion, a lack of accountability, and no clear career planning. On a positive note, it also showed that teamwork and guest focus were common in the organisation. The ideal values that employees wanted to see included accountability, strong communication and career development.

Going forward we have to communicate more clearly, be more transparent, and ensure accountability is felt throughout the Group. Some of our initiatives include a weekly finger lunch for our top 50 managers so we can keep in touch with each other. We also now have a regular call-in with the top 200 managers for an update and discussion on how the business is doing. Written communication with all staff via e-mail is also helping. We looked at blogs and twitter but have decided that they are not appropriate forms of communication for staff – we will continue to monitor these and other social media.

Basically, culture is set at the top and with all the changes that are being made we can expect a positive shift in attitude going forward.

KELE MAZWAI Director: Group Human Resources

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Governance and sustainability

05Maintain inclusion in the JSE’s SRI Index

Enhance environmental management and finalise carbon footprint strategy

Improve corporate social investment, socioeconomic development and enterprise

development initiatives

Improve stakeholder engagement




Governance and sustainability are fundamental to Sun International’s

operations and are interwoven into our strategy and decision-

making processes, from board and management level to our

operations. Our credible track record that underlies our corporate

reputation protects our current business and supports our

expansion into new territories, given the focus of governments

and regulators on operators who understand and deliver on

their responsibilities as responsible corporate citizens.

Sun International recognises that the development, operation

and management of its hotels, resorts and gaming operations

have environmental and social implications and as such, has

entrenched our governance and sustainability principles within

the Group’s Corporate Sustainability Strategy (CSS) which aims

to integrate sustainability considerations into the Group’s

business decisions, operations and strategy.

The Group’s CSS has been crystallised into the Group’s

sustainability policy which reflects Sun International’s

commitment to sustainable development and is underpinned

by the following key tenets:

� Complying with legislation

� Maintaining an ethical climate throughout its operations

� Engaging with stakeholders

� Implementing management systems that are aligned with

international best practice

� Promoting environmental and social responsibility among

guests, employees, suppliers, contractors and concessionaires

� Applying social and environmental criteria to the sourcing

of goods and services wherever practical

� Demonstrating environmentally and socially responsible

behaviour

� Demonstrating good corporate governance

A copy of the Group sustainability policy can be accessed online at http://www.suninternational.com/corporate/sustainability/policy/Pages/default.aspx

One of the reasons we remain at the forefront of good

corporate governance in South Africa is the tireless effort put in

by our Director of Corporate Services and Legal, Chantel Reddiar.

Chantel and her team continue to set the bar even higher in

the constantly changing and demanding world of corporate

governance. They steer me, our board and management through

the complex requirements of many regulatory bodies and ensure

that we do not just comply, but excel. I had much to learn in my

new role and have relied heavily on her guidance.

Q A

Q: How does Sun International approach corporate responsibility?

Corporate responsibility lies at the heart of the Group’s decision-making considering the highly regulated environment within which we operate. While many corporates speak of a licence to operate, ours is in essence a regulated licence to operate. Although it is imperative that we abide by legislation, we believe that corporate citizenship is about more than ticking boxes – it is about doing the right thing! Our corporate responsibility is reflective of Sun International’s contribution towards social, economic and environmental sustainability. Our sound corporate reputation is based on living our values, transparency, accountability and ethical leadership within the organisation. It speaks to the responsible operator that we are, and our reputation provides assurance to the governments of countries where we seek to do business.

Q: Do we prioritise responsible gaming as part of our approach?

Absolutely. South Africa’s National Responsible Gambling Programme (NRGP) is internationally acclaimed for its sound responsible practices, and Sun International, as a founding member of the NRGP, remains actively involved in the programme. It is a leading example of a collective industry approach to ensuring responsible gambling which underpins the sustainability of the industry.

Responsible gambling is at the heart of our gaming practices. We offer intensive training to our staff at multiple levels and regularly report to the board on the key aspects of responsible practices which include detail such as unattended minors on the gaming floors and crèche utilisation rates at our properties. In addition, our internal audit team performs NRGP audits at all our units in terms of their NRGP practices, and the Group standard is not to fall below 90% with the majority of our units scoring 100% in these audits.

CHANTEL REDDIARDirector: Corporate services and legal

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Q: What about our approach to corruption and bribery – is it a potential risk when exploring new opportunities in foreign markets?

The Group’s anti-corruption policy has been approved by the board, and rolled out across the Group. We have a zero tolerance approach to any form of corruption or bribery, and we clearly set out the sanctions that would be applied should any employee be found to have engaged in prohibited practices.

The anti-corruption principles have been communicated through road shows at each unit, and are now part of our onboarding of new employees.

Q: What about our approach to reporting sustainability?

We participate in the JSE’s SRI Index which recognises JSE-listed companies that integrate and report on good governance practices in relation to triple bottom line performance.

As another indicator of our approach, the first Sustainability Data Transparency Index was created by IRAS this year. In this regard, IRAS reviewed the public reports of all JSE-listed companies, as well as any other entities known to produce a GRI-based annual report, integrated or otherwise, to look for quantitative data in respect of 56 different key sustainability indicators. Of the 400 companies that were measured in terms of transparency in reporting sustainability, Sun International was placed 20th – a very pleasing result.

Go

vernan

ce and related sustainability

conc

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SOCIETY

ENVIRONMENT

CLIM

ATE CHANGE

SRI INDEX

Training and development,

employee relations, equal opportunities, health and

safety, HIV/Aids, community relations, stakeholder engagement, black

economic empowerment

Addressing all key issues and working

towards environmental sustainability

Managing and reporting on efforts to

reduce carbon emissions and deal with the

anticipated effects of climate change

Board practice, ethics, indirect impacts, business

value and risk management, and broader economic

issues

We have a number of initiatives or objectives that fall into the

“corporate responsibility” space. The following sections discuss

those which are currently most strategically important to

the Group.

MAINTAIN INCLUSION IN THE JSE’S SRI INDEXThe JSE’s SRI Index offers an aspirational benchmark and

measures companies’ policies, performance and reporting in

relation to environmental, social and economic sustainability,

as well as corporate governance practices.

Within the environmental criteria, companies are classified as high,

medium or low impact based on their activities. Sun International

is classified as a medium impact company. To be included in the

JSE’s SRI Index, companies must meet the minimum core and

desirable indicators within the areas of measurement depicted

below.

The Group’s biggest focus in the year ahead will be on the climate

change area of measurement.



The board remains committed to ensuring the Company’s

ongoing inclusion in the JSE’s SRI Index. The 2013 JSE SRI Index

review has commenced and the outcome of the Group’s

participation will be announced in November 2013.

ENHANCE ENVIRONMENTAL MANAGEMENT AND FINALISE CARBON FOOTPRINT STRATEGY Sun International recognises that its operations have

environmental and social implications and, as such, has

entrenched its sustainability policy throughout the Group.

A new Group environmental manager was appointed in the

year under review to focus on specific environmental areas and

coordinate strategy and implementation across our units.

A key area of focus for the Group environmental manager will

be to facilitate reporting of the Group’s carbon footprint with

a view to ensuring the reduction of carbon emissions. The

carbon footprint initiative continues to be guided by the

Greenhouse Gas Protocol. In this regard, a carbon footprint

baseline was established in the 2011 financial period and the

carbon footprint for 2012 and 2013 was determined based on

Scope 1 and Scope 2 emissions.

Scope 3 emissions have not been included in the Group’s

carbon footprint this year; however, it is intended that we will

incorporate these emissions for which we have data in our

2014 Integrated Annual Report.

EARTHGLOW INITIATIVE LAUNCHEDIn taking a coordinated and active approach to sustainability management across the Group, the

EarthGlow sustainability programme has been launched and encompasses our CSS. While the Group has

been strong in its environmental stewardship over the years, EarthGlow is a drive to consolidate

sustainability management across the Group and promote continued improvement in our numerous

programmes.

The objectives of EarthGlow are to:

Build awareness and ownership of the EarthGlow platform

Motivate employees to be Sun International sustainability ambassadors, and to live an

environmental culture by engaging, educating and rewarding

Raise awareness among guests of our sustainability activities and results and involve them,

as appropriate, to enhance their experience and brand affinity

Leverage our reputation and activities through relevant sustainability partnerships

Build stronger relationships by engaging and informing other key stakeholders, including

contractors, suppliers, media and investors

Be innovative where we can

Monitor sustainability communication campaigns to track effectiveness and to provide content

for communications and reporting

Celebrate achievements and report transparently on results.

While our core sustainability principles have remained the same, our focus now is to operationalise

EarthGlow throughout the Group. This includes setting specific targets at unit level across the key pillars

of water, energy consumption, waste management and enterprise and socioeconomic development. The

rollout of the ERP system will support data generation and measurement of our progress in these areas.

We are also implementing an ISO14001 environmental management system (EMS) in all of our units. The

full ISO14001 EMS system will be rolled out at our larger units that have significant data requirements, while

a simplified version will be used in smaller units that have less capacity. Both versions will still capture all data

relevant to reporting requirements, which will allow us to measure the tangible benefits of these initiatives.

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IMPROVE SOCIOECONOMIC DEVELOPMENT AND CORPORATE SOCIAL INVESTMENT INITIATIVES Our operations have a significant impact on local economies

through job creation and local economic multipliers. We

recognise that this is a symbiotic relationship as we depend

on the goodwill and stability of the communities in which

we operate.

Sun International is committed to spending 3% of after tax

profits on a combination of socioeconomic development (SED)

and corporate social investment (CSI) initiatives, using a ratio

of a 2% contribution of SED and 1% to CSI.

Our aim is to have a positive impact on society, while making

a sustainable contribution to the economy and society.

Our projects are managed both centrally through the

Sun International Social Community Development Trust

(SISCDT) and by each property, with our properties focusing

on the immediate communities within which they operate.

To ensure meaningful and sustainable projects, the SISCDT

commissioned CSI Solutions to evaluate the impact of these

projects on the communities in which the properties operate.

Consequently, we will drive our commitments by considering the requirements of local communities in our areas of operation, focusing on projects that empower local communities through education, health and welfare, and development through sports,

arts and culture.

IMPROVE GROUP ENTERPRISE DEVELOPMENT INITIATIVESThe Group is reviewing its enterprise development (ED) initiatives to see where we can improve delivery and the impact of our ED spend. In the past we have relied on early settlement of suppliers to achieve the majority of our ED spend which has had little impact on the development of qualifying entities. In the future we will be focusing on loan funding and investment to create and develop meaningful broad-based black economic

empowerment (B-BBEE) suppliers.

IMPROVE STAKEHOLDER ENGAGEMENTThe Group has a formalised stakeholder engagement process in place and has identified its key stakeholders, having regard to those that have a material impact on the Group and those on which the Group may have a material impact.

The Group’s stakeholder impact matrix is depicted below.

Stakeholder matrix 2013/2014

KEY

1 Customers

2 Equity partners

3 Employees

4 Gambling boards

5 Other regulators

6 Media

7 Banks

8 Provincial government

9 Unions: SACCAWU/COSATU/SATAWU

10 National governments

11 Service providers

12 Investors

13 Suppliers

14 Local government structures, e.g. police

15 Public benefit organisations, e.g. BACSA

16 CASA

17 SA Responsible Gambling Trust

18 Local and foreign embassies

SIL

IMPA

CT

HIG

HM

EDIU

MLO

W

LOW MEDIUM HIGH

STAKEHOLDER IMPACT

16

12

11

14

15

13

1

32

47

8

109

5

6

17

18



A stakeholder engagement review is undertaken annually to

ensure currency and relevancy of material stakeholder issues.

This supports our objective to engage appropriately with all

our stakeholders on identified issues such that decision-

making in the Group holds benefit for affected parties, taking

into account their legitimate interests and expectations.

In the year under review, the Group undertook an independent

study with the Gordon Institute of Business Science which

conducted a standardised ethical procurement survey. The

survey was performed on procurement departments at all our

units, including head office, and included anonymous feedback

from suppliers drawn from our supplier database.

The supplier ratings were exceptionally high which indicates

that the Group is highly regarded across its supplier base for

sound and thorough ethical practices. The Group will continue

to monitor this area to ensure that this pleasing result is

maintained.

Investor relationsIn an independent survey undertaken during the year, we

received mixed feedback with regard to our investor relations

strategy. Using input from the survey we are updating and

evolving our investor relations strategy which in future will

be more proactive as opposed to reactive as it was in the past.

To this end, and for the first time, we produced an investor

presentation which is available on our website at:

http://suninternational.investoreports.com/resultsreports/2012-2016/

The presentation was well received and clearly sets out the

Group’s strategic focus areas and the results for the year.

In the investor community, we are undertaking intensive one-

on-one engagement with investors and shareholders to ensure

that they have a comprehensive understanding of the Group,

its strategy and performance. Information obtained from our

interactions will inform our strategy and decisions.

Regulator surveyIn 2014, the Group will be commissioning a survey to evaluate

the perceptions of its key regulators. We will initially target

gaming boards, which are the key touch points in our

day-to-day operational dealings. The study will aim to identify

any perception gaps or issues that should be addressed.

Although the Group maintains strong and productive relationships

with its regulators, we need to ensure that we continue to

actively build on these relationships and deal adequately with any

issues that this stakeholder group may raise.

We have elevated the custodianship of gaming board relationships

to key executive managers with a view to strengthening our

relationships with the gaming boards.

THE MASLOW

JohannesburgThe Maslow is the ultimate business

hotel providing an environment where individuals can reach

their full potential

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In summary, we believe that while challenges lie ahead we have a unique portfolio of assets and strong brand positioning relative to our competitors.

The following are some of our key strengths:

As can be seen in the various sections setting out our strategy

and short- to medium-term objectives, there is a lot going on

to improve and grow our business and ensure that we leverage

all the advantages we have and provide a differentiated guest

experience. Despite these efforts, in the absence of a significant

improvement in the current South African economic environment,

we anticipate trading to remain difficult in the year ahead.

Gaming revenue will be impacted by a full year under the

smoking ban in Chile, while rooms revenue is expected to

continue growing well off fairly low levels. We are confident

our strategic initiatives to improve performance and reduce

costs will have a meaningful impact on revenue and margins;

however much of this is only likely to materialise in the 2015

financial year given the time needed for these measures to

take effect. Our strategic initiatives to leverage our existing

portfolio and also grow into new products and areas should

position the business well for the future.

Thanks to the teamIt remains for me to thank the executive team for the extremely

hard work that they are putting into this business – especially now

that, in addition to their day-to-day roles, they take on all the new

strategic objectives we have set. Fortunately there is an amazing

depth of experience among my executives, only a few of whom

have been singled out for mention in this report.

I also extend my thanks to the management teams at our

properties, who wake up every day, put a smile on their faces

We have great hotels in Cape Town, Johannesburg, Lagos and Victoria Falls

We have exclusive casino licences in Cape Town, Port Elizabeth, Polokwane, Kimberley and Bloemfontein – all offering a range of gaming, hospitality, food and beverage and entertainment experiences

We have well positioned, right-sized and very competitive casino properties in Johannesburg and Durban

We have the best operation in Chile and are soon to have the best in Panama

We have the irreplaceable Sun City

We are introducing new state-of-the-art gaming technology

We own great events such as the Nedbank Golf Challenge and the Miss South Africa pageant – and we have the best entertainment facilities

We have a depth of management experience in emerging markets and a proven development track record which should lead to further opportunities being secured in the destinations we are targeting

Outlook



and drive our business. They have to answer to the increasing

challenges set for them by head office – and they have to

motivate their people to achieve them.

Lastly and most importantly, to our employees: the dealers,

slots technicians, call centre and sales staff, waiters and

waitresses, housekeeping, chefs and so many others – a special

word of thanks to all of you who are the most visible touch

point between our organisation and our guests. No matter

how hard we work or how magnificent our properties are,

without a positive guest experience at your level of interaction,

we cannot expect to succeed.

There is a lot of work ahead, but as a team I have no doubt we

can deliver something special. I look forward to it.

WILD COAST SUN

Eastern CapeSet on the rugged, beautiful and unspoiled beaches of the Transkei

in the Eastern Cape

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Corporate governance review

HOW WE GOVERN OUR BUSINESS

Ethical leadershipThe Sun International Group remains committed to ethical and

responsible leadership. Our leaders are held accountable for

sound corporate governance practices which are embedded

throughout the Group’s companies, in all jurisdictions in which

we operate. Our code of ethics articulates the Group’s

commitment to all its stakeholders.

Read more about the Group’s stance on ethics and

whistleblowing online at http://ir.suninternational.com/4/

Key developments

� Implemented the Group’s anti-corruption policy

� Undertook initiatives to drive ethical awareness throughout

the Group

� Launched a Spanish-medium ethics hotline for Monticello, Chile

� Commissioned independent research to establish supplier

perceptions of the Group’s procurement relative to ethical

practices

� Reviewed, without amendment, the Group’s code of

ethics, which commits management and employees to the

highest ethical standards of conduct.

GovernanceOur commitment to good governance remains underpinned

by the pillars of fairness, transparency, accountability and

responsibility to all stakeholders. These pillars preserve the

Group’s long-term sustainability, thereby delivering value to all

stakeholders.

The Group’s key tenet is to do the right thing and its governance

practices are integral to its licence to operate in society. The

board, as the custodian of corporate governance, continues to

provide the focal point for corporate governance in the Group.

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Our full corporate governance report can be accessed online at http://ir.suninternational.com/5/

Key developments

� Participated in the JSE’s SRI Index 2012

� Close to completing the Group’s membership of the

UN Global Compact

� Membership of the National Business Initiative

� Developed a comprehensive King III assessment register.

The board confirms that the Group complied with the

Code of Governance Principles as set out in the King III

assessment register, which can be accessed online at

http://ir.suninternational.com/3/

Sustainable business practicesThe board is cognisant of the Group’s responsibility to people,

planet and profit, and considers the sustainability of the

Group’s business practices and its potential impact on all

stakeholders, including the environment. The Group’s strategic

focus areas have been developed in the context of sustainable

business practices. The board assesses the sustainability of the

Group’s strategic initiatives by conducting an assessment of

the long-term impact of any strategic project on the Group’s

stakeholders.

Our corporate citizenship is enhanced through continuously

monitoring the sustainability of our business practices and it

remains our strategic intent to protect and grow our business

into the future.

Key developments

� Submitted a water and forest disclosure to the Carbon

Disclosure Project (CDP) during 2013

� Launched a unique programme that integrates social and

environmental initiatives under the banner of “EarthGlow”

� Group membership of the World Wide Fund for Nature

(WWF)

� Engaged further with our people through a Group-wide

culture survey

� Reformulated a Group policy on HIV/Aids and other

potentially life threatening diseases

� Revision of a Group corporate social investment policy

� The board again engaged the services of an external

assurance provider to provide an independent assurance

statement on the Group’s sustainability reporting as

advocated by King III. The independent sustainability

assurance statement is available online at


Risk managementEffective risk management is imperative to a Group with our

risk profile. The realisation of our business strategy depends

on us being able to take calculated risks in a way that does

not jeopardise the legitimate interests of stakeholders. An

enterprise-wide approach to risk management has been adopted

by the Group, which means that every key risk in each part of

the Group is included in a structured and systematic process of

risk management.

Key developments

� Rolled out Business Continuity Management across the

Group

� Implemented a Group legal compliance policy

� Approved IT risk-related policies

� Reformulated the Group’s ranking of risks and risk approach

� Reviewed Group’s risk appetite and risk tolerance and

applying this to the Group’s decision-making

� Applied the Group’s assurance model to key risks facing

the Group, particularly in a challenging economic

environment.

RES

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FAIRNESS

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Corporate governance review continued

THE BOARD OF DIRECTORSStatement of complianceThe board has satisfied itself with the extent of the Company’s

compliance with King III and with the JSE Listings Requirements

as articulated in this report and the King III assessment register,

which can be accessed online at http://ir.suninternational.com/3/.

The board is pleased to report that there have been no material

instances of non-compliance or material fines imposed during

the year under review. While the board is satisfied with its

level of compliance in accordance with applicable governance

and regulatory requirements, it recognises that the Group’s practices

can always be improved, and accordingly the board has and

will continue to review the Group’s governance framework

against best practices. Further details can be found in the statement

of responsibility by directors and the Directors’ report on pages

86 and 88 respectively.

Board leadershipSun International has a unitary board structure comprising a

mix of executive and non-executive directors, the majority

of who are independent non-executive directors. The board

presently comprises three executive and ten non-executive

directors, eight of who are considered independent in terms

of governance criteria. The non-executive directors have the

necessary skills, qualifications and experience, as is evident

from their résumés, to provide judgement independent of

management on material board issues. The composition of the

board is detailed in the directorate section of the report. We

value diversity on our board and of the 13 directors, six are

women. The tenure of directors serving on the board ranges

from directors who are long-serving and are familiar with the

industry within which we operate, to new directors with skills

and experience in other industries.

Director appointments in 2013This year, the board welcomed Mr Peter Bacon as an

independent non-executive director. Mr Bacon, a former Chief

Executive of the Group (2003 to 2006) brings a wealth of

industry experience to the board. In addition, changes in

the executive management of the Group resulted in the

appointment of two executive directors, Mr Graeme Stephens

(Chief Executive) and Mr Anthony Leeming (Chief Financial

Officer). The résumés of the aforementioned directors can be

found on page 12.

AccountabilityThe board’s role is to exercise leadership and sound judgement

in directing Sun International to achieve sustainable growth in

the best interests of its stakeholders. The board is regulated by

a board charter which details the manner in which the business

should be governed by the board in accordance with the

principles of sound corporate governance and organisational

integrity. The board charter is reviewed annually.

EDs/NEDs

Independence

Race

Gender

TENURE OF DIRECTORS

0–2 years 2–4 years 4–6 years 6–8 years 9 yearsor more

3

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ChairmanThe board is chaired by Mr MV Moosa, a non-executive director, appointed as board Chairman since 1 July 2009. Mr Moosa has been reappointed as Chairman for the year under review.

Although the Chairman is not independent, he brings valuable expertise to the board and continues to exercise independent judgement in relation to board matters. The Chairman of the board is responsible for, inter alia, ensuring the integrity and effectiveness of the board’s governance processes, and in terms of the Company’s Memorandum of Incorporation, is subject to annual election from among its members. The Chairman’s reappointment follows an evaluation of his performance during the year under review.

Board appointmentsProcedures for appointment to the board are formal and transparent and are a matter for the board as a whole. The board is assisted in this process by the nomination committee which has clear criteria for the selection of board directors.

In terms of the Company’s Memorandum of Incorporation, new directors appointed since the last annual general meeting (AGM) may only hold office until the next AGM at which time they will be required to retire and offer themselves for election. Accordingly, Messrs Bacon and Stephens, having been appointed with effect from 1 February 2013 and Mr Leeming, having been appointed with effect from 1 March 2013, will stand for election at the forthcoming AGM. Their résumés summarising their experience can be found on pages 12 to 13.

Lead Independent Director (LID)The board charter requires the appointment of a LID in the event that the board chairman does not meet the independence criteria in terms of the requisite governance principles.

Mr IN Matthews was appointed as the LID with effect from 1 July 2009 and has been reappointed as the LID for the year under review. The LID is appointed annually should the chairman not be independent. The LID provides leadership and guidance at any meetings or in consultations with other directors or executives in circumstances where the board chairman may be subject to a conflict of interest. The LID is instrumental in leading and introducing discussion at board and committee meetings regarding the performance and evaluation of the board chairman.

Rotation of directorsDirectors retire by rotation at least once every three years in accordance with the Company’s Memorandum of Incorporation. The nomination committee assesses the performance of those directors and recommends their re-election to the board and shareholders.

In this regard, the nomination committee, having concluded its performance assessment, recommends the re-election of the retiring directors, Mr IN Matthews, Mr PL Campher and Ms BLM Makgabo-Fiskerstrand, all of who, being eligible, have offered themselves for re-election at the 2013 AGM. Their résumés can be found on pages 12 to 13.

BRIEF OVERVIEW OF THE BOARD AND ITS PROCESSES

IndependenceThe board, through the nomination committee, annually assesses the independence of the non-executive directors against the criteria set out in King III, the JSE Listings Requirements, as well as the Companies Act. The board confirms that two of its non-executive directors are not considered independent as they are shareholders and directors of Lereko Investments (Pty) Limited, which is a material shareholder of Dinokana Investments (Pty) Limited, the Group’s empowerment partner. The remaining eight non-executive directors are considered independent in terms of the 2013 independence assessment.

The nomination committee conducted a rigorous independence assessment of the non-executive directors who have served on the board for nine years or more, and concluded that these directors retain their independence in character and judgement, notwithstanding their length of service, and that there were no relationships or circumstances that were likely to affect or be perceived to affect their independence. The board concurred with these findings and is of the view that the aforesaid non-executive directors bring valuable experience and skill to the board, and that they will continue to exercise their independent judgement.

Chief Executive and delegation of authorityMr Graeme Stephens was appointed as Chief Executive on 1 February 2013. The board’s governance and management functions are linked through the Chief Executive, who is tasked with running the business and implementing the policies and strategies adopted by the board. The role and function of the Chief Executive is formalised, and the board, through the remuneration committee, annually evaluates the performance of the Chief Executive against specified criteria. In addition the Chief Executive’s performance in his capacity as a director of the board is assessed by the nomination committee. The Chief Executive delegates the appropriate authority to his management team in terms of defined levels of authority and retains accountability to the board.

Director induction and ongoing developmentOn appointment to the board, all directors are provided with an induction programme and materials aimed at broadening their understanding of: their fiduciary duties and responsibilities; the regulatory, statutory and governance framework; the Group and the business environment and markets in which the Group operates. All directors are expected to keep abreast of changes and trends in the business and in the Group’s markets. This includes changes and trends in the economic, political, social and legal environments. Training is provided to accelerate board competencies, where necessary, in terms of the Group’s professional development policy.

Board meetingsA minimum of four board meetings are scheduled each financial year. In addition, the board holds a fifth meeting, in the form of an annual strategy meeting, together with executive management, to deliberate the Group’s strategic direction and to agree the Group’s annual budget as proposed by management. The Group’s key strategic objectives are set at the strategy meeting and progress is reported at each board meeting. The board attendance is depicted in the table on page 59.



THE ROYAL LIVINGSTONE

ZambiaAt the Royal Livingstone Hotel, on the banks of the Zambezi River that flows

through the soul of Africa, your own story waits to be told

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Board committees and attendanceThe board is authorised to form committees to assist in the execution of its duties, powers and authorities and currently has six standing

committees. The composition of the committees and committee member attendance during the year is as follows:

Review of board and committee composition and attendance – 1 July 2012 to date of this report

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Non-executive directors

PDS Bacon1

ZBM Bassa

PL Campher2

NN Gwagwa

BLM Makgabo-Fiskerstrand

IN Matthews

B Modise

LM Mojela3

MV Moosa

DM Nurek4

GR Rosenthal5

Executive directors

GE Stephens6

AM Leeming7

KH Mazwai

RP Becker8

G Collins9

Executive management

S Montgomery

TS Ndlela

CA Reddiar

SD Wing11

TC Kaatze10

JA Lee10

DS Whitcher10

DR Mokhobo10

M Naidoo10

HJ Brand10

J Coetzee10

1 Appointed to board on 1 February 2013 and to the risk committee on 28 May 2013

2 Appointed to the audit committee on 23 November 20123 Appointed to the nomination committee on 20 August 20134 Retired from the board and audit committee on 23 November 20125 Appointed to the social and ethics committee on 28 May 2013

6 Appointed to board on 1 February 20137 Appointed to board on 1 March 20138 Resigned from the board with effect from 28 February 20139 Resigned from the board with effect from 1 February 201310Membership to risk committee formally re-constituted on 28 May 2013 11Appointed and attended the risk committee on 21 August 2013

Committee meeting attendance ApologiesBoard meeting attendance


Key matters dealt with by the committees during the 2013 financial year

Nomination committee � Concluded the search for and nomination to the board of the Chief Executive

� Recommended the establishment of an investment committee to consider and evaluate the viability of proposed investment

opportunities, given the Group’s expansion strategy

� Made specific recommendations to the board on the reconstitution of the risk committee and its IT governance sub-committee,

to create alignment with the executive management restructure and streamline processes under committee review.

Risk committee � The number of executive members on the committee was reduced to align its composition with the Group’s key business

functions

� Revised the risk methodology underpinning the Group’s practices

� Provided oversight on the Group-wide rollout of business continuity management, the Group’s legal compliance policy and

the anti-corruption policy

� Developed, through its IT governance sub-committee, a policy and charter outlining the decision-making rights and

accountability framework for IT governance together with a review of the IT governance framework, in particular the

relevant structures, processes and mechanisms to enable IT to deliver value to the business and mitigate IT risk

� Made recommendations on several key IT governance-related policies with Group-wide implication.

Investment committee � Considered and evaluated the viability of proposed investment opportunities, disposals and expansion projects for

recommendation to the board

� Reviewed feasibilities and prospects of success relating to such projects

� Considered potential strategies relating to the Group’s existing asset portfolio.

Key matters dealt with by the audit, remuneration and the social and ethics committees are set out in their respective

reports on pages 64 to 79.

Board, director and committee evaluationsThe board Chairman, LID, board committees and the board members are evaluated annually on their performance, processes and

procedures in an online self-evaluation, the last evaluation having been carried out during April 2013.

Based on the results of the 2013 evaluations, the directors are of the opinion that the board and its various committees have effectively

discharged their responsibilities in accordance with their respective written terms of reference.


Each board committee has a charter, or terms of reference, that is formally approved by the board and is reviewed annually by the board and the respective committee to ensure relevance. The chairpersons of the committees report to the board on a quarterly basis in terms of their committees’ respective terms of reference and copies of all committee minutes are circulated to the full board.

The board charter and board committee terms of reference can be accessed online at http://ir.suninternational.com/7/

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Group company secretaryChantel Reddiar was appointed as the Group company secretary

in April 2010. Chantel holds the following qualifications: BA;

LLB; LLM; MBA and has 13 years’ experience as a corporate

lawyer. Based on the nomination committee’s assessment and

having given due consideration to the matter, the board is

of the opinion that the Group company secretary has the

requisite knowledge, qualifications and experience to carry out

the duties of a company secretary of a public listed Company

and that she maintains an arm’s length relationship with the

board. She provides a central source of advice to the board on

the requirements of the JSE Listings Requirements; the Companies

Act; King III and corporate governance. Ms Reddiar’s résumé

can be found online at


Group internal auditGroup internal audit (GIA) provides management and the

board of directors with independent evaluations and

examinations of the Group’s activities and resultant business

risks. The purpose, authority and responsibility of the internal

audit department are formally defined in an internal audit

charter which is reviewed by the audit committee and

approved by the board.

The internal audit department is designed to maintain an

appropriate degree of independence to render impartial and

unbiased judgements in performing its services. The scope of

the internal audit function includes: performing independent

evaluations of the adequacy and effectiveness of Group

companies’ controls, financial reporting mechanisms and

records, information systems and operations; reporting on the

adequacy of these controls; and providing additional assurance

regarding the safeguarding of assets and financial information.

Internal audit is also responsible for monitoring and evaluating

operating procedures and processes through, inter alia, gaming

compliance, Responsible Gambling Programme compliance,

operational health and safety, and environmental audits. Risk

assessment is coordinated with the board’s assessment of risk

through interaction between internal audit and the audit and

risk committees so as to minimise duplication of effort.

In accordance with the International Standards for the

Professional Practice of Internal Auditing, GIA will be subject

to an external quality assurance. The last such review was

conducted in respect of the 2011 financial year.

Internal financial controlsThe board of directors is responsible for the Group’s systems

of internal financial controls. These systems are designed to

provide reasonable, but not absolute assurance, as to the

integrity and reliability of the financial statements and to

safeguard, verify and maintain accountability of its assets, as

well as to detect and minimise significant fraud, potential

liability, loss and material misstatement while complying with

applicable laws and regulations. GIA has provided a positive

assurance to the board on the state of the Group’s internal

financial controls. Further detail in this regard can be found in

the audit committee report on pages 84 to 85.

Stakeholder engagementThe board has delegated the responsibility to deal with

stakeholder relationships in a proactive and constructive manner

to management. The initiatives and activities for the year are

more fully reported in the full corporate governance report,

available online at


Risk managementA sound and effective risk management system is crucial to the

long-term development of the Group over and above the key

role provided by the Group’s risk committee. The realisation of

the Group’s business strategy depends on being able to take

calculated risks in a way that does not jeopardise the legitimate

interests of stakeholders. Sound management of risk enables

the Group to anticipate and respond to changes in its business

environment, as well as take informed decisions under conditions

of uncertainty.

An enterprise-wide approach to risk management has been

adopted by the Company, which means that every key risk in

each part of the Group is included in a structured and systematic

process of risk management. All key risks are managed within a

unitary framework that is aligned to the Company’s corporate

governance responsibilities.

Risk management processes are embedded in the Group’s

business systems and processes, so that its responses to risk

remain current and dynamic. All key risks associated with

major change and significant actions by the Company also fall

within the processes of risk management. The nature of the

Group’s risk profile demands that Sun International adopts a

prudent approach to corporate risk, and that decisions around

risk tolerance and risk mitigation reflect this. Nonetheless, it

is not the intention to slow down the Group’s growth with

inappropriate bureaucracy. Controls and risk interventions are

chosen on the basis that they increase the likelihood that the

Company will fulfil its intentions to stakeholders. The Group

firmly believes that every employee has a part to play in this

important endeavour.

Each risk is comprehensively reviewed and is managed by the

business through mitigating controls, key action plans and

accountability by risk owners.



The Group’s top 20 key risks, which have been comprehensively reviewed by the risk committee, are summarised as follows:

Top 20 risk scenarios LOW MEDIUM HIGH

GrandWest licence exclusivity renewal

Impending smoking legislation

Gaming policies’ changes

Increase in gaming taxes

Competition for disposable income

Empowerment charter pressures

Appointment and retention of PDIs

Increase in Class 2 slot machines (Bingo)

International expansion or diversification

Illegal slot machines

Industrial relations

Competitor actions

Value for money and service ethics

Pressure on management agreements and fees

Marketing and sales restructure

Gearing levels prevent achieving objectives

Career planning

Underperformance of new acquisitions

Competition from online gaming

Limited payout machines licenced under new conditions

Assurance modelThe board has adopted a combined assurance model, which aims to optimise the assurance coverage obtained from management

and its internal and external assurance providers on the risk areas affecting the Company. The combined assurance model and

strategy for 2013 was approved by the risk and audit committees and addresses the balance between executive management and

the independent internal and external assurance providers in providing assurance on the coverage of the Group’s key risks.

The Group’s application of its assurance model can be found online at http://ir.suninternational.com/10/

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Independent sustainability assuranceThe board has again engaged the services of an external

assurance provider, IRAS, to provide an independent assurance

statement on the Group’s sustainability reporting as advocated

by King III. Although the Group has had several independent

assessments conducted, particularly in the areas of environmental

management and risk, an external assurance assessment of

this nature can be beneficial in indicating those areas where

the Group’s business practices meet sustainability criteria,

and in identifying those areas where there is room for

improvement. The board confirms that the Group has achieved

a B+ rating on the sustainability information set out in this

Integrated Annual Report.

Internal assurance is provided by our internal audit department.

Our external assurance providers include

PricewaterhouseCoopers Inc. (PwC), Integrated

Reporting and Assurance Services (IRAS) and

Marsh, amongst others.

1

2 3

Management

External assurance provider

Internal assurance provider

CombinedAssurance

Model

Combined assurance

Risk affecting the Company

The full assurance statement can be found online at http://ir.suninternational.com/6/

In summaryThe board is of the opinion that the Group creates value

for its stakeholders ethically and responsibly and that these

governance principles will continue to provide a principled

and ethical foundation that enhances the Group’s corporate

reputation and contributes to its long-term sustainability.

We will continue to report transparently and on material

sustainability issues facing the Group. Interested stakeholders

can find detailed information about the Group’s governance

practices online and comments from stakeholders can be sent to:

[email protected]


Remuneration report

LETTER TO SHAREHOLDERSDear shareholders

he 2013 year brought with it changes to the executive leadership of the Group and significant changes to executive variable remuneration, that emphasises performance-related remuneration linked specifically to the achievement of the Group’s

key strategic objectives. These changes have had several implications for the remuneration committee (the committee), including, inter alia, oversight of the realignment of the executive management team; the consequent alignment of executive performance contracts with the Group’s strategic objectives; and the revisions to the Group’s short-term and long-term incentive plans, as detailed in this report.

This report further highlights the Group’s remuneration policy, structure and other benefits with a reporting emphasis on the revisions to the variable remuneration design. This is followed by the remuneration disclosures of the executive directors. The Group remains committed to transparency on its remuneration reporting.

During the year we undertook a comprehensive remuneration

review, which centred on incorporating non-financial performance measures. The key tenets underlying the Group’s remuneration philosophy have remained constant: to ensure the creation of an appropriate and competitive base of talented employees of the right calibre, experience and skills; rewarding employees fairly and equitably; motivating employees to achieve the highest levels of performance in alignment with the Group’s strategic objectives; and the pursuit of shareholder value creation.

The Group’s remuneration policy is designed to ensure that we attract and retain highly motivated and talented employees who take pride in working for the Group, thereby assisting in the delivery of the Group’s values and mission that envisions the Group being internationally recognised as a successful leisure Group offering superior gaming, hotel and entertainment experiences. The committee is cognisant that its remuneration model must be balanced in terms of competing for talent in a competitive market and shareholder value creation.

The executive team, under the leadership of Mr Graeme Stephens, has conducted extensive talent reviews in the latter part of this

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year to clearly identify talented employees throughout the Group to ensure that the appropriate skills, including leadership potential, are nurtured and developed. Although management had already commenced its talent strategy, it became evident that an emphasis had to be placed on developing a depth of potential successors to key and critical roles throughout the organisation, given the leadership changes within the Group. The committee has reviewed the initial findings of the various talent management initiatives and, while it is encouraged by the significant progress achieved in a relatively short space of time, the implementation and oversight of the Group’s talent strategy will remain a key imperative for both management and the committee in the year ahead.

The committee’s terms of reference are reviewed annually and sets out the committee’s mandate and undertakings. Details can be found online at http://ir.suninternational.com/7/. This year, the committee was further guided by the publication of the Institute of Directors in Southern Africa’s Position Paper 1 for remuneration committees. The committee is satisfied that it has fulfilled its responsibilities in compliance with its written terms of reference in all material respects during the year. This was evidenced by an evaluation of the committee’s self-assessment findings and the annual review of the effectiveness of the committee.

In addition, the committee confirms that the remuneration principles adopted are consistent with market practices and remuneration governance guidelines. The reinforced emphasis on a pay for performance methodology will ensure an integrated application of the Group’s remuneration policy that will stand up to the scrutiny of all legitimate stakeholders and deliver sustainable corporate performance.

The committee has challenged certain fundamentals of the Group’s executive remuneration structure and has worked extensively with external remuneration experts to ensure that the implemented structures are meaningful and will incentivise management to create long-term shareholder value. This was underpinned by the call of key stakeholders to simplify the Group’s variable long-term incentives. To this end, the committee met five times during the year under review to extensively canvass the matters at hand with 100% attendance of members at committee meetings.

The changes made to executive remuneration this year reflect the stronger alignment between pay and performance, and we trust that this philosophy will meet with your support at the 2013 annual general meeting. The year ahead will focus on the implementation of the revised variable remuneration structure, resulting in management being clearly incentivised to deliver on the Group’s strategy.

This report has been approved by the board on the recommendation of the committee. Stakeholders are invited to submit comments on the Group’s remuneration policy as summarised below by emailing comments to

[email protected]

IN MatthewsChairman of the remuneration committee

decisionsKey

Reviewed the Chief Executive and executive team’s performance during the 2013 financial year, providing recommendations and approval of their guaranteed and variable remuneration for the 2014 financial year

Considered and agreed the remuneration packages for the newly appointed Chief Executive and Chief Financial Officer

Restructured and revised the performance contracts of the executive team to embed the Group’s strategic imperatives as key performance indicators (KPIs)

Redesigned the Group’s long-term incentive plans to simplify the operation thereof

Reviewed the Group’s executive succession planning

Talent review strategy agreed and implemented

Approved a change to the Group’s medical aid offerings in the new year

Settlement of the Group’s original long service awards policy for non-bargaining unit employees and the formulation of a revised market-related policy

Review and approval of this remuneration report

Revised the Group’s short-term incentives to align it with the business unit, Group and personal performance

TAKEN IN 2013

During the year under review, the committee comprised Mr IN Matthews (committee Chairman and Lead Independent Director), Ms ZBM Bassa, Mr PL Campher and Mr MV Moosa (board Chairman). The résumés summarising the committee members’ experience can be found on pages 12 and 13 of the Integrated Annual Report.


Remuneration report continued

REMUNERATION STRUCTUREThe different components of the Group’s executive remuneration structure, its purpose and the manner in which this links to the overall Group strategy are summarised below.

Fixed pay Variable pay

Insured

benefits

Long-term

incentives:

share planShort-t

erm

incentive:

EBS

Trav

el

allo

wan

ce

Med

ical aid

Retirement funding

GU

ARA

NTEED REMUNERATIO

N

The Group’s total remuneration consists of guaranteed remuneration for the majority of employees and is supplemented with variable pay at senior levels of management.

GUARANTEED REMUNERATION

Fixed component which reflects individual contribution and market value for the role

Positioned at market median to upper quartile (taking into consideration the size and complexity of the role as benchmarked by external remuneration experts)

Paid monthly in cash net of allocations to travel allowances, retirement fund, insured benefits and health benefits

Reviewed annually

REMUNERATION POLICYThe Group is guided by the following best practice remuneration principles:

� Provide remuneration that attracts, retains and motivates employees, and helps to develop a high performance culture to create a strong link between performance incentives and shareholder returns

� Provide a measure of flexibility within the remuneration structure

� Ensure that remuneration levels are competitive relative to the market and the Group’s competitor set

� Remunerate employees according to their individual contribution and delivery of strategic and operational performance

� Ensure a balance of financial and non-financial benefits to address retention and development of talented employees

� Establish remuneration levels that provide for equitable pay that is consistent and transparent, but differentiates between average and excellent performers in line with the Group’s renewed focus on talent management

� Ensure that remuneration structures promote improved sustainable corporate performance and remain affordable to the Group

� Ensure alignment across the business units and the Group’s strategy

� Customise remuneration in all operations outside South Africa as may be required by local legislation and practice, but match the fundamental Group remuneration principles, wherever possible

� Reinforce teamwork, a culture of belonging and high commitment among the Sun International team

� Withstand scrutiny by the Group’s various stakeholders

� Utilise remuneration experts as and when required to ensure that the Group’s remuneration is appropriate and in line with the market.

The committee will continuously review the Group’s remuneration principles to ensure that the Group remains competitive and orientated toward market best practices.

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Holistically, the Group seeks to remunerate management (guaranteed package plus “target” short-term incentive) at a level between the median and the upper quartile of the market rate. The median normally represents competitive market value, and typically, an employee at the median is considered to be fully competent to complete all the tasks required for the job. External benchmarks are obtained by the Group for purposes of positioning total remuneration and for determining the relevant reference points. In addition, factors such as projected inflation, internal equity and affordability are taken into account. Performance is considered to be one of the most important factors determining total pay and therefore the Group differentiates between average and outstanding performance, remunerating individuals based on their contribution to the Group’s strategic objectives and operational deliverables.

Once again this year, higher salary increments were targeted at junior levels of staff with lower salary increments applied at more senior management levels (average increase of 6% for executive management). Any increase above 6% at executive management level was to compensate for a promotion or an increased responsibility given the restructure of the Group’s management functions.

The Group’s long service awards policy was extensively reviewed, as market research reflected that the benefits provided under the policy exceeded market practices as the award was linked to the employees’ total cost of employment

(TCOE). The Group decided to settle the long service award liability as at 30 June 2013 on the basis of an actuarially determined settlement proposal. The settlement was positively received and accepted by non-bargaining unit employees and the Group remains in discussion with the union in terms of its acceptance on behalf of its members. As the overriding purpose of the long service award was to demonstrate that Sun International recognises and values the contributions of its employees, a new long service policy has been formulated to celebrate with those permanent employees who reach continuous long service “milestones”, through a system of moderate awards that are not linked to TCOE.

The Group’s total labour cost across all levels of the organisation amounted to 18.5% of the Group’s revenue.

Revisions to variable remunerationAs a result of the 2013 committee review, and with the assistance of leading remuneration experts, the committee has redesigned the Group’s variable remuneration. The changes emphasise market best practices and accommodate individual contribution to achieve the Group’s strategic objectives in the years ahead.

A brief snapshot of the 2012/2013 variable remuneration is set out on the next page together with a detailed description of the 2013/2014 variable remuneration.



2013/2014

Revisions to the short-term incentive (Executive Bonus Scheme – EBS)

2012/2013

The EBS is calculated as a percentage of the employees’ TCOE

EVA (to measure return on

investment)

EBITDA (to measure

short-term cash generation)

Weightings 70% 30%Above target uncapped capped

One third of the EBS earned above the target is paid in cash and two thirds deferred to a bonus bank for years when targets are not met.

The 2012/2013 EBS led to a mechanistic approach and did not

enable the differentiation of individual performance as EBS was

entirely dependent on financial measures (EVA® and EBITDA). In

addition EVA® is a complex financial measure and not all levels

of management have clear line of sight into its workings with

only a few employees making capital expenditure decisions.

Qualifying TCOE + +Target

incentive percentage

Business factor 67%

Target incentive

percentagePersonal

factor 33%

Target Incentive PercentageThe target incentive percentage will depend on the employee’s grade and will be determined from time to time by the committee based on prevailing market trends.

Business factorThe Business factor will be dependent on performance against the business driver(s) determined by the committee for each relevant financial year and will be as follows:

Targets Business factor

Threshold business driver 0%

Target business driver 100%

Stretch business driver 200%

The business driver is based on EBITDA. For unit employees the EBITDA performance will be equally weighted between Group and respective unit in order to determine the extent to which the business driver has been met, whereas for Group employees the EBITDA performance will be based on the Group results. Linear interpolation will be used to determine the Business factor in case of performance between the threshold, target and stretch performance.

Personal factorThe Personal factor will be dependent on the performance assessment of the employee for the relevant financial year as follows:

Personal performance levels Personal factor

Exceptional performance 200%

Fully performing 100%

Not fully performing 50%

Weak performer 0%

No EBS will be payable to an employee who is assessed as a weak performer in terms of his/her most recent performance assessment. If the business driver performance is below threshold, management will assess and may make recommendations to the committee to reduce the personal component (e.g. Personal factor is limited to 33%).

EBSEBS will be determined as a percentage (“target incentive percentage”) of an employee’s Qualifying TCOE and will be dependent on a Business factor and a Personal factor for the most recent financial year as follows:

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EGP – Right to acquire shares at a future date calculated by reference to the appreciation in the value of the share price between grant date and exercise date. Three year vesting period and subject to performance conditions.

CSP – Shares allocated to employees, held in escrow by an agent, subject to forfeiture if tenure and performance targets are not met over the performance period – three year vesting period. Participants receive dividends effective from the 2012 award.

DBP – Voluntary deferral of part of after-tax bonus by executives to acquire shares. Shares purchased are held in

escrow by an agent for three (3) years and, after vesting period, a matching component (1:1) of shares are transferred to the executive.

RSP – Shares are allocated to participants on date of grant. The vesting of shares subject to continued employment, where vesting period is three years 100% of the vesting takes place, where vesting period is five years 50% vest in year three and 25% each in years four and five. Participants receive dividends during the vesting period. These dividends are forfeited and are repayable upon resignation or termination of employment before the end of the vesting period.

The 2012/2013 Group long-term incentives comprised four share plans

2013/2014 long-term incentive – share plans

Revisions to the long-term incentive

The complexity of the Group’s share plans provided the relevant catalyst for a redesign of the Group’s LTIs with differentiated payout to participants for out-performance and a lower payout (if any) for under-performance. In addition, the LTIs were aligned more directly to the Company’s strategy by using the STI as a proxy for the awards allocated in terms of the RSP (to be renamed the Bonus Matching Share Plan or BMSP).

The number of share plans in operation has been reduced and the CSP and DBP will no longer be utilised by the Group. The EGP and RSP plans will be retained as modified and depicted on the next page.

EGP

RSP

CSP DBPEquity Growth

Plan

Restricted Share Plan

Deferred Bonus Plan

Conditional Share Plan



The EGP will operate as follows:

The RSP (to be renamed “BMSP”) will operate as depicted below:

Conditional right to acquire shares

Shares acquired based on the share price

appreciation between grant and exercise dates

Based on best practice benchmarks (face value). Award levels adjusted by

reference to individual performance

Voluntary leavers forfeit vested and unvested awards. No fault leavers can exercise right for six months after termination

Growth in AHEPS or share price over performance period. CPI plus 0% = threshold and CPI plus 6% = target

Three-year vesting period, subject to continued employment and performance conditions. Linear vesting between threshold and target with nil vesting below threshold. Exercise period seven years from grant

EGP

VESTING AND EXERCISE

AWARD LEVELS

PERFORMANCE CONDITIONS

TERMINATION

NATURE

VALUE

Forfeitable shares owned by participant from date of grant, but subject to forfeiture during vesting period. Shares held in escrow

A full share based on formulae. During vesting

period, participants receive dividends paid in

respect of shares

Permanent employees who qualify to participate in EBS

and at the discretion of the remuneration committee

Unvested awards will be forfeited

Already tested by EBS calculation and continued employment remains the vesting condition

Three-year vesting period, subject to continued employment

RSP(to be

renamed)

VESTING AND EXERCISE

AWARD LEVELS

PERFORMANCE CONDITIONS

TERMINATION

NATURE

VALUE

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A summary of the revisions to both the STI and LTI plans are reflected below:

The Group is confident that the revisions to the STI and LTI plans position the Group to incentivise its management appropriately while ensuring the long-term sustainability of the business and protecting shareholder interests.

Per the summarised executive remuneration changes set out above, the executive theoretical remuneration mix is based on the on target STI and expected value of the EGP award:

Employment contract with an executive:

The Company concluded a fixed term contract with Mr SD Wing, the Chief Operating Officer, for a period of 12 months from 1 July 2013.

CE CFOExecutive

management

Guaranteed package 36% 45% 49%Short-term incentive 31% 27% 24%Long-term incentive 33% 28% 27%

BONUS

Business factor = 50% unit;

50% Group EBITDA

Personal factor = individual

performance from 0% to

200%

BONUS MATCHING SHARES

Vests after three years.

No further performance

conditions as EBS subject to

stringent performance

conditions

No EBS = no bonus

matching shares

EGP AWARDS

Vests after three years.

Targeted growth in AHEPS or

share price over performance

period. CPI plus 0% =

threshold and CPI plus 6% =

target

STI LTI

Portion matched

[On target bonus %]

x [Business factor] x

[Personal factor]

% of EBS matched

in forfeitable bonus

matching shares –

attracts dividends

Share appreciation rights linked to % of TCOE for senior

management



DISCLOSURES OF 2013 REMUNERATIONBased on the remuneration policy and principles summarised previously, the Group provides its disclosure on the actual remuneration paid to executives and prescribed officers as well as details regarding their long-term incentive awards and share vestings for the year under review. The Group, having considered the matter, is of the opinion that its executive directors are the only prescribed officers of the Group.

Total emoluments

Rand SalaryGross

bonusRetirement

contributionsOther

benefits

Paymentin terms

of mutualagreement Total

2013GE Stephens 3 847 080 3 862 083 519 051 335 200[2] – 8 563 414[1]

AM Leeming 2 079 931 1 898 347 366 977 611 685[2] – 4 956 940[1]

KH Mazwai 1 911 148 1 212 640 429 300 402 137[3] – 3 955 225G Collins* 3 438 310 3 432 000 542 028 2 361 158[4] – 9 773 496[5]

RP Becker* 3 332 403 2 491 671 747 501 487 058[6] 8 941 271[7] 15 999 904

Total 14 608 872 12 896 741 2 604 857 4 197 238 8 941 271 43 248 979

2012KH Mazwai 1 724 065 979 000 391 702 302 148 – 3 396 915

G Collins 3 121 363 2 599 185 518 538 594 728 – 6 833 814

RP Becker 3 142 513 2 092 064 705 189 70 020 – 6 009 786

DC Coutts-Trotter 2 359 041 – 409 897 153 859 8 076 053 10 998 850

Total 10 346 982 5 670 249 2 025 326 1 120 755 8 076 053 27 239 365

* Resigned during the financial year on 1 February and 28 February 2013 respectively.1 This disclosure is for the full financial year notwithstanding their appointments to the board being made on 1 February and 1 March 2013 respectively.2 Long service award settlement.3 Includes five-year long service award and long service award settlement.4 Includes a R2 000 000 incentive payment and a R361 158 payment for seven months in the financial year as the Acting Chief Executive.5 Notwithstanding the resignation of G Collins, his full remuneration for the financial year is disclosed.6 In terms of statutory provisions and labour law legislation, RP Becker was paid out all outstanding annual leave, and other benefits totalling R487 058.7 In terms of a separation agreement, RP Becker was paid a restraint of trade payment of R4 792 093 and a separation payment of R4 149 178.

The executive directors and executive management that serve on the Group’s subsidiary boards do not receive any fees in their personal capacities for this role and, to the extent applicable, any fees payable as a result of this office are waived in favour of the Group.

SHORT-TERM INCENTIVESFor the year under review the STIs earned were attributable to the percentage of the pre-determined target achieved and is disclosed below.

IndividualSTI payment

30 June 13On-target

STI % of target

achieved

GE Stephens 3 862 083 3 713 542 104%AM Leeming 1 898 347 1 825 333 104%KH Mazwai 1 212 640 1 166 000 104%G Collins 3 432 000 3 300 000 104%RP Becker 2 491 671 2 491 671 100%

Total 12 896 741 12 496 546

Share based payment expenseThe expense recognised during the year in respect of the share awards are set out in terms of IFRS 2 for all unvested instruments per executive director.

Name Rand

GE Stephens 3 844 200AM Leeming 2 660 786KH Mazwai 2 714 627

Total 9 219 613

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LONG-TERM INCENTIVESThe Group’s share plans are equity settled and the total number of shares held on behalf of participants, allocated under the Group’s share plans, amount to approximately 0.95% in aggregate of the Group’s issued share capital based on an assumed 100% vesting.

AWARDS MADE TO EXECUTIVE DIRECTORS/PRESCRIBED OFFICERS UNDER SHARE PLANS AS AT 30 JUNE 2013

Date of grant Grant price

Grants held 30 June

2012

Grantsmade/

(forfeited) Grants

exercised

Grants held 30 June

2013

Gains on theexercise of

share optionsand grants

Present valueof existing

future awards

GE STEPHENS

EGP 29 964 – – 29 964 – 795 881

29.06.2011 89.46 12 099 12 099 312 275

27.06.2012 90.07 17 865 17 865 483 606

CSP 35 630 – – 35 630 – 1 802 775

29.06.2011 n/a 15 826 15 826 688 736

27.06.2012 n/a 19 804 19 804 1 114 039

DBP – 6 241 – 6 241 – 596 702

03.09.2012 n/a 6 241 6 241 596 702

RSP# 147 329 – – 147 329 – 14 086 125

01.10.2011 n/a 62 161 62 161 5 943 213

01.02.2013 n/a 85 168 85 168 8 142 912

Total – 17 281 483

AM LEEMING

EGP 60 196 (7 700) (7 200) 45 296 160 654 945 765

30.06.2006 82.74 7 200 (7 200) – 160 654

30.06.2008 90.47 7 700 (7 700) – *

30.06.2009 77.25 8 767 8 767 **

29.06.2010 84.12 10 398 10 398 251 840

29.06.2011 89.46 10 667 10 667 275 315

27.06.2012 90.07 15 464 15 464 418 610

CSP 44 839 (13 864) – 30 975 – 1 564 817

29.06.2010 n/a 13 864 (13 864) –29.06.2011 n/a 13 949 13 949 607 050

27.06.2012 n/a 17 026 17 026 957 767

DBP 6 293 3 520 (2 575) 7 238 222 660 692 025

06.10.2009 n/a 2 575 (2 575) – 222 660

30.09.2010 n/a 1 463 1 463 139 877

27.09.2011 n/a 2 255 2 255 215 601

03.09.2012 n/a 3 520 3 520 336 547

RSP# 71 138 – (6 020) 65 118 553 178 6 225 932

01.12.2008 n/a 12 039 (6 020) 6 019 553 178 575 477

27.06.2012 n/a 33 925 33 925 3 243 569

01.03.2013 n/a 25 174 25 174 2 406 886

Total 936 492 9 428 539




Grants held 30 June

2012

Grantsmade/

(forfeited) Grants

exercised

Grants held 30 June

2013




future awards

KH MAZWAI

EGP 59 016 (12 508) – 46 508 – 937 213

30.06.2008 90.47 12 508 (12 508) – *

30.06.2009 77.25 10 156 10 156 **

29.06.2010 84.12 11 374 11 374 275 478

29.06.2011 89.46 11 444 11 444 295 370

27.06.2012 90.07 13 534 13 534 366 365

CSP 45 428 (15 166) – 30 262 – 1 508 028

29.06.2010 n/a 15 166 (15 166)

29.06.2011 n/a 15 259 15 259 664 061

27.06.2012 n/a 15 003 15 003 843 967

DBP 988 2 973 (187) 3 774 16 170 360 833

06.10.2009 n/a 187 (187) – 16 170

27.09.2011 n/a 801 801 76 584

03.09.2012 n/a 2 973 2 973 284 249

RSP# 65 046 – (10 254) 54 792 942 240 5 238 663

01.12.2008 n/a 20 508 (10 254) 10 254 942 240 980 385

27.06.2012 n/a 44 538 44 538 4 258 278

Total 958 410 8 044 737

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Grants held 30 June

2012

Grantsmade/

(forfeited) Grants

exercised

Grants held30 June

2013




future awards

G COLLINS

Share options 52 188 – (38 125) 14 063 2 710 086 1 344 563

06.03.2003 26.50 4 375 (4 375) – 339 063

01.08.2003 31.56 9 375 (9 375) – 707 297

12.09.2003 32.95 3 750 (3 750) – 277 688

25.11.2003 39.01 11 250 (11 250) – 764 944

30.06.2004 40.75 9 375 (9 375) – 621 094

30.06.2005 61.83 14 063 – 14 063 1 344 563

RP BECKER

EGP 122 403 (109 852) (12 551) – 234 226 –

30.06.2006 82.74 12 551 (12 551) – 234 226

30.06.2008 90.47 15 209 (15 209) –30.06.2009 77.25 19 817 (19 817) –29.06.2010 84.12 21 992 (21 992) –29.06.2011 89.46 21 021 (21 021) –27.06.2012 90.07 31 813 (31 813) –

CSP 92 377 (92 377) – – – –

29.06.2010 n/a 29 322 (29 322) –29.06.2011 n/a 28 028 (28 028) –27.06.2012 n/a 35 027 (35 027) –

DBP 15 851 9 880 (25 731) – 2 504 117 –

06.10.2009 n/a 7 256 (7 256) – 627 426

30.09.2010 n/a 1 256 (1 256) – 127 585

27.09.2011 n/a 7 339 (7 339) – 745 496

03.09.2012 n/a 9 880 (9 880) – 1 003 610

RSP# 125 811 (89 803) (36 008) – 3 173 575 –

01.12.2008 n/a 40 016 (20 008) (20 008) – 1 838 535

01.10.2009 n/a 16 000 (16 000) – 1 335 040

27.06.2012 n/a 69 795 (69 795) –

Share options 200 000 (200 000) 8 335 000

30.06.2005 61.83 200 000 (200 000) – 8 335 000

Total 14 246 918 –

* Performance conditions not met, EGP rights lapsed** Performance conditions not met – subject to re-testing, however, EGP rights not expected to vest# Vests in three tranches


AWARDS MADE TO EXECUTIVE DIRECTORS/PRESCRIBED OFFICERS UNDER SHARE PLANS SUBSEQUENT TO 30 JUNE 2013

Name Date of grant Grant price Grants made


future awards

GE STEPHENSEGP 02.09.2013 94.87 114 923 3 028 221

RSP 02.09.2013 95.00 28 358 2 694 010

AM LEEMINGEGP 02.09.2013 94.87 47 357 1 247 857

RSP 02.09.2013 95.00 13 137 1 248 015

KH MAZWAIEGP 02.09.2013 94.87 33 257 876 322

RSP 02.09.2013 95.00 7 688 730 360

NON-EXECUTIVE DIRECTOR FEESFees payable to non-executive directors for their services as directors and for their participation in the activities of the committees are recommended by the executive directors to the committee for consideration and thereafter considered by the board for submission to shareholders, if applicable, in terms of a special resolution in accordance with the Companies Act No 71 of 2008.

Non-executive director fees are determined on the basis of a base annual fee and an attendance fee per meeting as advocated by King III and this practice is extended to non-executive directors of the Group’s various subsidiary boards.

Proposed fees for the next financial year are determined by the end of the previous financial year and are payable quarterly in arrears, after approval by shareholders at the annual general meeting. In the case of new appointments or resignations from the board or committees during a financial year, the annual fees are pro-rated in line with the period of tenure of office.

Fees paid to non-executive directors by the Company and its subsidiaries – during 2013 financial year:

RandSubsidiaries

and trust feesDirector’s

feesCommittee

feesTotal2013

Total2012

PDS Bacon1 – 122 000 12 500 134 500 –

ZBM Bassa – 221 300 172 100 393 400 379 172

PL Campher 50 000 221 300 262 850 534 150 417 220

NN Gwagwa – 221 300 38 700 260 000 257 870

BLM Makgabo-Fiskerstrand – 221 300 42 900 264 200 248 775

IN Matthews 30 000 374 400 307 450 711 850 669 425

B Modise – 221 300 96 600 317 900 230 052

LM Mojela 33 813 198 600 5 000 237 413 259 488

MV Moosa – 879 100 241 300 1 120 400 1 203 108

DM Nurek2 – 76 600 60 500 137 100 321 804

GR Rosenthal – 221 300 265 450 486 750 452 610

113 813 2 978 500 1 505 350 4 597 663 4 439 524

1 Appointed 1 February 2013 2 Retired 23 November 2012


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During the year under review, the Group commissioned an external independent benchmark of non-executive director fees against comparable listed companies at the instance of management. Given the increased regulatory and governance landscape, management recommended that the non-executive director fees be increased to the extent that that some of the fees were out of kilter with the market. The committee, having considered the challenging operating environment, elected to restrict the increase in non-executive director fees to the increase applied to executive management salaries, being 6%. This is within the 10% increase mandate approved by shareholders in advance and accordingly the fees applicable to the financial year ahead have been implemented. The fees are set out below for noting:

2014 2013

Rand Base fee

Attendancefee per

meeting Base fee

Attendancefee per

meeting

Services as directors– chairman of the board 721 500 42 100 680 600 39 700

– Lead independent 276 600 24 100 260 990 22 700

– directors 114 300 24 100 107 800 22 700

Audit committee– chairman 96 200 27 100 90 800 25 600

– members 48 200 13 600 45 400 12 800

Remuneration committee– chairman 43 400 26 500 40 900 25 000

– members 21 800 13 300 20 500 12 500

Nomination committee – chairman 36 100 18 100 34 100 17 100

– members 18 200 9 100 17 100 8 600

Risk committee– chairman 53 000 28 900 50 000 27 300

– members 26 500 14 500 25 000 13 700

Social and Ethics committee– chairman 36 100 18 100 34 100 17 100

– members 18 100 9 100 17 100 8 600

Investment committee*– chairman – 3 500 – –

– members – 2 500 – –

* The investment committee was constituted during the financial year and members are paid an hourly fee for these ad-hoc meetings.

Attendance fees have been paid to the directors of the Company for all ad-hoc meetings that were called in addition to the scheduled meetings, as approved by shareholders at the 2012 annual general meeting.

In line with best governance practices, the non-executive directors do not participate in any of the Group’s short- or long-term incentives nor do they earn any consultancy fees.


Report of the social and ethics committeefor the year ended 30 June 2013

The main purpose of the social and ethics committee is to assist the board in ensuring that the Group is, and remains, a good and responsible corporate citizen

by overseeing the sustainable development performance of the Group.

INTRODUCTIONThe social and ethics committee (“committee”) was constituted as a statutory committee in 2011 in accordance with regulation 43(3)(a)(i) of the Companies Regulations, 2011 (“the Regulations”) to assist the board in ensuring that the Group remains a good corporate citizen. This is the third year of the committee’s existence and our processes and review have evolved over this period, ensuring that material matters are canvassed by the committee within clearly defined parameters.

The committee also performs all the requisite functions in terms of the aforesaid Regulations on behalf of all subsidiaries in the Group and reports to the subsidiary boards in terms of the execution of its statutory mandate. This ensures that decisions taken at the committee level are implemented across the Group with accountability at board level.

The committee’s membership since inception in 2011 comprised Messrs MV Moosa (board Chairman); PL Campher and Ms BLM Makgabo-Fiskerstrand, all of whom are non-executive directors of the Company. During the year under review and as a result of the board’s assessment of the committee, it was deemed prudent to supplement the committee’s membership with the appointment of the audit committee chairman, Mr GR Rosenthal, given the significant overlap between matters addressed by both committees. Accordingly, Mr Rosenthal was appointed to the committee with effect from 28 May 2013. The résumés of the committee members can be found on pages 12 and 13 of the Integrated Annual Report.

Executive management are standing invitees of the committee and are represented by the Chief Executive, Chief Financial Officer, Director: Corporate Services and Legal, Director: Legal Affairs, Director: Group Human Resources, Director: Group Internal Audit and the Group environmental manager. These invitees also represent business areas that fall within the remit of the committee’s review.

The committee is chaired by Mr MV Moosa who reports to the board following each committee meeting and to shareholders at the Company’s annual general meeting in accordance with regulation 43(5)(c) of the Regulations, on matters canvassed by the committee in accordance with its approved terms of reference. The committee’s mandate and terms of reference can be accessed online at


In fulfilling its mandate and with the view to enhancing the Company’s corporate reputation, the committee met on four separate occasions during the year under review to consider the Group’s activities having regard to relevant legislation, other legal requirements or prevailing codes of best practice, in respect

of matters relating to social and economic development, good corporate citizenship, the environment, health and public safety; consumer relationships; and labour and employment. These matters are canvassed more fully in the remainder of this report.

SOCIAL AND ECONOMIC DEVELOPMENTThe committee has reviewed the Group’s standing and progress in accordance with the goals and purposes of the 10 principles set out in the United Nations Global Compact Principles (UNGC Principles) and the Organisation for Economic Co-operation and Development guidelines for multinational enterprises 2011 regarding corruption. The committee concurred that the Group either complied with or exceeded the requirements of the UNGC Principles, and that there were no material areas of concern raised with the committee during the period under review.

The committee oversaw the finalisation of the Group’s anti-corruption policy as well as monitored the rollout of the policy across the Group. It is the intention that this policy, which reflects the board’s and the Group’s zero tolerance on corruption, will be extended to all third parties supplying or servicing the Group, as the Company wishes to partner with organisations that share this philosophy, thereby reducing the likelihood of corruption. The committee is pleased to report that there have been no reported infringements of this policy during the year under review.

The Company remains committed to the advancement of employment equity and matters relating to broad-based black economic empowerment (B-BBEE). The committee further reviewed the Group’s standing and progress against the Employment Equity Act and the Broad-Based Black Economic Empowerment Act. In this regard, the committee has considered the Group’s progress in terms of employment equity and while good progress has been attained, the committee has tasked management to accelerate its progress at certain levels of management within the organisation.

The committee is satisfied that the Group’s B-BBEE rating as verified by Empowerdex, an external accredited verification agency, has been maintained at Level 2 contributor status.

GOOD CORPORATE CITIZENSHIP AND THE IMPACT OF THE GROUP’S ACTIVITIESIn its commitment to the promotion of equality, the prevention of unfair discrimination and zero tolerance for corruption, the committee has reviewed the Group’s policies, processes and undertakings to ensure that these matters are sufficiently monitored and addressed throughout the year. Good corporate citizenship is fundamental to the Group’s licence to operate.

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In the year under review, the committee reviewed the Group’s code of ethics, all ethics-related policies, the results of the Group’s culture survey and management’s efforts to refresh the use of the KPMG Ethics Hotline as a tool for reporting unethical behaviour, while continuing in its endeavours to drive ethical awareness across the Group. With the view to enabling greater detection of occupational fraud, the committee mandated management to roll out the KPMG Ethics Hotline facility to suppliers and service providers and oversaw the introduction of a dedicated Spanish-medium hotline at its Monticello operation in Chile, which was successfully implemented. Group internal audit (GIA) reports to this committee on all significant cases of fraud and theft, as well as calls received through the respective ethics hotlines.

In addition, the Company commissioned independent research through the Gordon Institute of Business Science to establish the views of its suppliers relating to the Group’s ethical practices regarding procurement. The results of the supplier study evidenced that the Group was exceptionally well regarded by its suppliers in terms of its procurement practices.

The committee monitored the Group’s substantial initiatives and contributions towards the development of communities in which its activities are predominantly conducted or marketed. In addition, the committee reviews the Group’s enterprise develop-ment initiatives towards developing sustainable businesses and management has been requested to focus on consolidating its efforts to reduce its reliance on early settlement discounts.

GIA has verified the record of sponsorship, donations and charitable giving across the Group and submits an annual report to the committee for review.

With regard to the Group’s impact relating to the services provided, the Group remains firmly committed, as it has since inception, to the National Responsible Gambling Programme (the NRGP), which remains well regarded globally as a leading programme to promote responsible gaming. The NRGP publishes a quarterly report to create awareness of the public initiatives undertaken in the industry which include, among others, public awareness and prevention, treatment and counselling, training and interventions for regulators and industry employees, research audits, crèche utilisation, life-skills programmes for schools and self-exclusions. The committee reviews the Group’s progress in terms of a quarterly progress report.

ENVIRONMENT, HEALTH ANDPUBLIC SAFETYThe Company is committed to demonstrating environmentally responsible behaviour. The Group has appointed a Group environmental manager who attends all committee meetings in order to report on the Group’s progress on environmental and sustainability matters.

The Group implemented its EarthGlow sustainability programme during the year under review which will direct and focus the Group’s sustainability initiatives with firm targets that must be achieved. The committee receives a progress report on the nine pillars that comprise EarthGlow together with an environmental management review from GIA.

Key focus areas in the year ahead relate to the Group’s imple men tation of an ISO14001 environmental management

system, embedding the Group’s climate change policy together with carbon footprinting and disclosure, participation in the Carbon Disclosure Project through the submission of a carbon, water and forest disclosure and reinforcing the Group’s sustainability partnerships.

The committee has tasked management to remain focused in its efforts to ensure inclusion in the JSE SRI Index in 2013.

The Company is further dedicated to enhancing health and safety across its operations. In this regard, health and safety audits are conducted by GIA across the Group to ensure that health and safety matters are proactively monitored throughout the year.

During the period under review, there were no reported material incidents of environmental or health and safety impacts relating to the Group’s operations and activities that could potentially impact on communities, employees and/or customers.

CONSUMER RELATIONSHIPSThe committee reviews the Group’s stakeholder engagement with regard to consumer relationships. Extensive work is undertaken throughout the Group under the direction of the Group’s legal department to ensure awareness of and compliance with the Consumer Protection Act (CPA). Any instances of potential non-compliance are reported to the committee for consideration. There have been no complaints lodged against the Group under the CPA in the year under review.

LABOUR AND EMPLOYMENTManagement provides a report on the Group’s standing in terms of the International Labour Organisation’s protocol on decent work and working conditions as well as the results of any employee-related surveys.

The area of concern pertains to addressing union relationships and the committee is overseeing management’s efforts in this regard. The committee is further overseeing management’s efforts in addressing the findings of the Group’s culture survey with the view to improving the culture in the organisation and enabling the delivery of excellent people practices.

CONCLUSIONOverall, the committee is satisfied that there were no significant areas of risk with regard to the matters to be addressed bythe committee and prescribed by the Regulations and the committee’s board-approved terms of reference. Furthermore, the Group is pleased to report that there have been no material instances of non-compliance or material fines imposed during the year under review. Accordingly, the committee is comfortable that the Group operated in the year under review as a socially responsible corporate citizen demonstrating an ongoing commitment to sustainable development.

Valli MoosaChairman of the social and ethics committee

15 October 2013


Number ofshareholdings %

Numberof shares %

SHAREHOLDER SPREAD1 – 1 000 shares 2 295 69.29 659 756 0.58

1 001 – 10 000 shares 458 13.83 1 456 284 1.28

10 001 – 100 000 shares 352 10.63 13 888 945 12.17

100 001 – 1 000 000 shares 188 5.68 53 976 460 47.29

1 000 001 shares and over 18 0.54 33 598 533 29.44

3 311 99.97 103 579 978 90.76

Treasury stock 1 0.03 10 549 477 9.24

Totals 3 312 100.00 114 129 455 100.00

DISTRIBUTION OF SHAREHOLDERSBanks/brokers 86 2.60 7 888 733 6.91

Close Corporations 25 0.75 26 692 0.02

Empowerment 2 0.06 6 719 759 5.89

Endowment funds 21 0.63 490 852 0.43

Government 1 0.03 90 500 0.08

Individuals 2 151 64.95 2 102 289 1.84

Insurance companies 50 1.51 8 222 614 7.20

Investment companies 83 2.51 2 374 243 2.08

Medical schemes 19 0.57 712 820 0.62

Mutual funds 198 5.98 41 002 283 35.93

Nominees and trusts 319 9.63 1 124 435 0.99

Other corporations 67 2.02 317 335 0.28

Public companies 6 0.18 32 446 0.03

Retirement funds 268 8.09 28 733 307 25.18

Employee share trusts and plans 14 0.42 3 730 185 3.27

Sovereign wealth fund 1 0.03 11 485 0.01

Treasury stock 1 0.03 10 549 477 9.24

Totals 3 312 100.00 114 129 455 100.00

PUBLIC/NON-PUBLIC SHAREHOLDERSNon-public shareholders 33 0.99 10 703 557 12.93

Directors and associates of the Company 16 0.48 154 080 0.14

Sun International Employee Share Plans 12 0.36 1 132 766 0.99

Sun International Employee Share Trusts* 2 0.06 2 597 419 2.27

Empowerment** 2 0.06 3 292 682 0.29

Treasury shares 1 0.03 10 549 477 9.24

Public shareholders 3 279 99.01 103 425 898 87.07

Totals 3 312 100.00 114 129 455 100.00

Sun International Employee Share Trusts* consist of the following holdings: 2 597 419 shares held directly and 2 889 496 held indirectly by the Sun International Employee Share Trust via Dinokana Investments (Pty) Ltd.

Empowerment** – 3 292 682 shares represent the effective direct beneficial shareholding of Dinokana Investments (Pty) Ltd less the shares allocated to the beneficiaries of the Sun International Employee Share Trust (indirect shareholding of 2 889 496 shares) and the Sun International Black Executive Management Trust (indirect shareholding of 403 186 shares).

Shareholders’ analysisfor the year ended 30 June 2013

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Numberof shares %

TOP 10 BENEFICIAL SHAREHOLDERS Allan Gray 10 652 701 10.28

Sun International Investments No. 2 10 549 477 10.18

Sanlam 8 830 913 8.53

Investment Solutions 7 595 055 7.33

Dinokana Investments (Pty) Ltd# 6 719 759 6.49

Metal and Engineering Industries 3 978 843 3.84

Old Mutual 3 972 212 3.83

Investec 3 137 008 3.03

Prudential 3 110 778 3.00

Sun International Employee Share Trust 2 597 419 2.51

Totals 61 144 165 59.03

# Consists of the registered holdings as per the share register in accordance with the B-BBEE transaction which includes Dinokana, Sun International Employee Share Trust and the Sun International Black Executive Management Trust.

Numberof shares %

TOP 10 FUND MANAGERSAllan Gray Asset Management 25 826 638 22.63

Investec Asset Management 12 999 062 11.39

Prudential Portfolio Managers 10 172 027 8.91

Sanlam Investment Management 9 396 072 8.23

Regarding Capital Management 6 224 785 5.45

Afena Capital 4 981 852 4.37

Element Investment Managers 2 760 028 2.42

Vanguard 2 560 585 2.24

Old Mutual Investment Group 1 995 751 1.75

Dimensional Fund Advisors 1 073 849 0.94

Metal and Engineering Industries 730 248 0.64

Totals 78 720 897 68.98

83

Annual fi nancial statements

CONTENTS

Annual fi nancial statements

Shareholder information

Report of the audit committee................. 84

Statement of responsibility by the board of directors..............................................

86

Company secretary certificate.................. 86

Independent Auditors report.................... 87

Report of the directors............................. 88

Group financial statements...................... 90

Accounting policies.................................. 134

Notice of annual general meeting............ 142

Form of proxy.......................................... 149

Electronic participation form.................... 151

Election form........................................... 152

Shareholders diary................................... 153

Abbreviations.......................................... 154

Administration......................................... 155


Report of the Audit Committeefor the year ended 30 June

The audit committee has pleasure in submitting this report to

shareholders as required by the Companies Act no. 71 of 2008

(the Companies Act) and as recommended by King III.

COMMITTEE MEMBERSHIPThe audit committee (the committee), nominated by the board

and appointed by shareholders in respect of the financial year

ended 30 June 2013, comprised of Mr GR Rosenthal (Chairman),

Mss ZBM Bassa, B Modise and Mr PL Campher. Mr DM Nurek

was also a member of the committee for part of the financial

year and retired at the 2012 annual general meeting. The

committee members are independent non-executive directors

of the Company and have the requisite financial skills and

experience to contribute to the committee’s deliberations.

The committee met four times in the year under review. Further

details are available on the website http://ir.suninternational.com/12/

in this regard.

During the period under review and following the performance

assessment by the nomination committee, the members of the

committee were nominated by the board for re-election to the

audit committee for the forthcoming financial year. The members

have availed themselves for re-election by shareholders at the

2013 annual general meeting. The abridged résumés of the

proposed committee members are set out on page 13 of this

Integrated Annual Report.

The Chief Executive; Chief Financial Officer; the Director:

Group Internal Audit; the Group’s Financial Manager;

Group Tax Manager and the external auditors attend the

committee meetings by invitation. The Chairman of the audit

committee is a member of the risk committee and social

and ethics committee, and attends these committee meetings

to ensure that the audit committee is kept apprised of matters

that are dealt with given the overlap of matters canvassed

by these committees and to provide the necessary assurances.

COMMITTEE MANDATE AND TERMS OF REFERENCEDetails of the committee’s board-approved mandate and terms

of reference are available online http://ir.suninternational.com/13/

and include both its statutory duties as detailed in the

Companies Act, and is supplemented with the duties assigned

to the committee by the board.

The committee is satisfied that it has considered and discharged

its responsibilities in accordance with its mandate and terms of

reference during the year under review as set out in this report.

This was further supported by the committee’s self-assessment

evaluation conducted in 2013 and the board’s assessment of the

committee’s effectiveness in fulfilling its mandate.

STATUTORY DUTIESThe committee is satisfied that, in the year under review, it has performed the functions required by law that is to be performed by an audit committee, including, inter alia, those requirements as set out in section 94(7) of the Companies Act and the JSE Listings Requirements. In this regard the committee has:

� evaluated the independence and effectiveness of the external auditors, PricewaterhouseCoopers Inc. (PwC), and is satisfied that the external auditors are effective and independent of the Company, having given due consideration to the parameters enumerated under section 94(8) of the Companies Act. The committee, having conducted such assessments, accordingly nominates PwC as the independent auditors to continue in office until the conclusion of the 2014 annual general meeting, noting that Mr ER Mackeown is appointed as the individual registered auditor and member of the aforegoing firm who will undertake the audit;

� considered and approved the audit fees payable to the external auditors in respect of the audit for the year ended 30 June 2013 ahead of the annual audit as well as their terms of engagement, taking into consideration factors such as the timing of the audit, the extent of work required and the scope of the audit;

� ensured and satisfied itself that the appointment of the external auditors, the designated auditor and IFRS advisor (PwC) are in compliance with the Companies Act, The Auditing Profession Act, 2005, and the JSE Listings Requirements;

� considered and pre-approved the non-audit services provided by the external auditors and fees relative thereto in terms of a policy established in conjunction with the external auditors, in which the nature and extent of all non-audit services provided by the external auditors are reviewed and approved in advance, ensuring that the independence of the external auditors is not compromised. The non-audit services policy and pre-approval authorisation process was reviewed during the year and the committee concluded that the processes outlined in the policy remain current and relevant;

� confirmed that no reportable irregularities were identified and reported by the external auditors in terms of the Auditing Profession Act 26 of 2005; and

� performed the audit committee functions for identified subsidiaries within the Group as contemplated by section 94(7) of the Companies Act. The committee reports to the various subsidiary boards following the annual Group audit.

To ensure that the relevant matters are thoroughly and frankly canvassed, the committee meets independently with management, Group internal audit and the external auditors. The committee oversees cooperation between the internal and external auditors, and serves as a link between the board of directors and the internal and external audit functions.

The committee did not receive any complaints relating to the accounting practices; internal audit; the content or auditing of

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the Group’s financial statements; the internal financial controls of the Group or any related matters.

EXPERTISE AND EXPERIENCE OF THE CHIEF FINANCIAL OFFICER AND THE FINANCE FUNCTIONThe board appointed Mr AM Leeming as the Chief Financial Officer of the Group with effect from 1 March 2013. The committee considered and satisfied itself on the appropriateness of the expertise and experience of the Chief Financial Officer, whose abridged résumé can be found on page 12 of this Integrated Annual Report.

The committee, having conducted a review of the appropriateness, skills and adequacy of resourcing of the Group’s finance function, has satisfied itself on the overall adequacy, resourcing and appropriateness of the finance function.

GROUP INTERNAL AUDITThe Group internal audit (GIA) function is more fully described in the corporate governance report online. GIA’s charter, as approved by the committee, is also available online at http://ir.suninternational.com/14/.

The head of GIA, Mr CS Benjamin, has unfettered access to the Chairman of the committee and meets with the Chairman independently of management several times during the year.

The committee considered and satisfied itself on the appropriateness of the expertise of Mr Benjamin as the head of GIA and confirmed that he has executed his duties competently with the relevant skill and expertise. In addition, the GIA function and adequacy of resources was reviewed in detail, and it was noted that the number of budget hours provided by GIA had been increased for the 2013/2014 year to provide for additional investigations that may be requested through various channels.

The committee has approved GIA’s annual audit plan for the 2013/2014 financial year. GIA provides services across the Group’s operations and conducts a myriad of internal audits during the year. Any weaknesses are brought to the attention of the committee, with GIA providing executive management’s comments and the remedial actions that were implemented if so required.

In accordance with the requirements of the Institute of Internal Auditors, GIA will undergo an independent quality assurance review on its effectiveness in respect of the 2014 financial year with the last such review being conducted in respect of the 2011 financial year. The results of the last review reflected that GIA “generally conforms” to the International Standards for the Professional Practice of Internal Auditing.

INTERNAL FINANCIAL CONTROLSThe committee confirms that GIA has adequately tested the Group’s internal financial controls to provide the board with positive assurance on key areas of the Group’s internal financial controls. These systems are designed to provide reasonable (but not absolute) assurance on the integrity and reliability of the financial statements, and to safeguard, verify and maintain accountability of its assets, as well as to detect and minimise

significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations.

The committee is of the opinion after having received the written confirmation relating to the positive assurance provided by the internal audit function, that the Group’s system of internal financial controls in all key material aspects, is effective and provides reasonable assurance that the financial records may be relied upon for the preparation of the annual financial statements.

INTERNAL CONTROLSGIA is of the opinion that the control environment of the Company is adequate and effective in meeting the risks to which the Company is exposed.

COMBINED ASSURANCEThe committee has reviewed the Group’s combined assurance model, which provides an additional mechanism that assists the Group in understanding and demonstrating its combined lines of defence in mitigating against areas of risk. The combined assurance model, as reflected on page 63 of this Integrated Annual Report, is structured on the top 20 key risks relevant to the Group. It has been evaluated by management, the risk committee and the audit committee during the year, thereby providing the committee with the relevant assurance in this regard.

SUSTAINABILITY REPORTINGThe committee fulfils an oversight role regarding the Group’s Integrated Annual Report and its reporting processes.

The committee has reviewed the findings of the external assurance provider, IRAS, emanating from the performance of an independent assurance exercise on the sustainability content of this Integrated Annual Report.

The committee is satisfied with the findings of the independent assurance exercise and, in addition, has reviewed the sustainability information set out in the Integrated Annual Report. The committee is satisfied that the sustainability information is reliable and consistent with the information contained in the annual financial statements.

RECOMMENDATION OF THE INTEGRATED ANNUAL REPORTThe committee, having fulfilled the oversight responsibility regarding the reporting process and having regard to material factors that may impact on the integrity of the information, has recommended the Integrated Annual Report and the consolidated annual financial statements for approval by the board of directors.

GR RosenthalChairman of the audit committee

15 October 2013


Statement of responsibility by the board of directorsfor the year ended 30 June

The directors are responsible for the preparation and integrity of

the annual financial statements and related financial information

that fairly present the state of affairs and the results of

Sun International Limited and that of the Group. The directors

also have oversight for the information included in the Integrated

Annual Report and are responsible for both its accuracy and its

consistency with the annual financial statements.

The annual financial statements, set out in this Integrated

Annual Report from pages 88 to 141, have been prepared

in accordance with the International Financial Reporting

Standards (IFRS) and in the manner required by the

Companies Act together with the JSE Listings Requirements.

These are based on appropriate accounting policies, which

have been consistently applied and which are supported by

reasonable and prudent judgements and estimates and fairly

present the state of affairs of the Group as at 30 June 2013.

The directors acknowledge that they are ultimately responsible

for the process of risk management and the system of internal

financial control established by the Group and accordingly

place considerable importance on maintaining a strong control

environment.

The directors are of the opinion, based on the information

and explanations given by management, the internal auditors,

external auditors and the Group’s various risk, governance,

compliance and other reporting processes, that the risk

management processes and the system of internal control

provide reasonable assurance in all key material aspects that

the financial records may be relied on for the preparation of

the financial statements. However, any system of internal

financial control can provide only reasonable and not absolute

assurance against material misstatement or loss.

Following due consideration of the operating budgets, an assessment of Group debt covenants and funding requirements, solvency and liquidity, the major risks, outstanding legal, insurance and taxation issues, and other pertinent matters presented by management, the directors are of the view that the Company and the Group have adequate resources and the ability to continue in operation for the foreseeable future. For these reasons, the financial statements have been prepared on a going concern basis.

The financial statements have been audited by the Group’s independent external auditors, PricewaterhouseCoopers Inc., who have been given unrestricted access to all financial records and related information including the minutes of shareholder, board and board committee meetings. PricewaterhouseCoopers Inc.’s unmodified audit report is contained within this Integrated Annual Report and can be found on page 87.

DIRECTORS’ APPROVALThe annual financial statements which were prepared under the supervision of the Chief Financial Officer, Mr AM Leeming, and which appear on pages 88 to 141, were approved by the board of directors on 15 October 2013 and signed on its behalf by:

MV Moosa GE StephensChairman Chief Executive

AM LeemingChief Financial Officer

15 October 2013

Company secretary’s certificate

TO THE MEMBERS OF SUN INTERNATIONAL LIMITEDI certify that, to the best of my knowledge and belief, the Company has lodged with the Companies and Intellectual Property Commission, all such returns required of a public company in terms of the Companies Act, in respect of the financial year ended 30 June 2013 and that all such returns are true, correct and up to date.

CA ReddiarGroup Company secretary

15 October 2013

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Independent auditor’s report

TO THE SHAREHOLDERS OFSUN INTERNATIONAL LIMITEDWe have audited the consolidated financial statements of

Sun International Limited set out on pages 90 to 141, which

comprise the statements of financial position as at 30 June 2013,

and the statements of comprehensive income, statements

of changes in equity and statements of cash flows for the

year then ended, and the notes, comprising a summary

of significant accounting policies and other explanatory

information.

Directors’ responsibility for thefinancial statementsThe Company’s directors are responsible for the preparation

and fair presentation of these consolidated financial statements

in accordance with International Financial Reporting Standards

and the requirements of the Companies Act of South Africa,

and for such internal control as the directors determine is

necessary to enable the preparation of consolidated financial

statements that are free from material misstatement, whether

due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these

consolidated financial statements based on our audit. We

conducted our audit in accordance with International

Standards on Auditing. Those standards require that we

comply with ethical requirements and plan and perform the

audit to obtain reasonable assurance about whether the

consolidated financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material

misstatement of the financial statements, whether due to

fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation

and fair presentation of the financial statements in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Sun International Limited as at 30 June 2013, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Other reports required by the Companies ActAs part of our audit of the consolidated financial statements for the year ended 30 June 2013, we have read the Report of the Directors, the Report of the Audit Committee and the Company Secretary’s Certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

PricewaterhouseCoopers Inc.Director: ER MackeownRegistered Auditor

Sunninghill15 October 2013


Report of the directorsfor the year ended 30 June

TO THE SHAREHOLDERS OF SUN INTERNATIONAL LIMITEDThe directors have pleasure in submitting the annual financial statements of the Sun International Group for the year ended 30 June 2013.

NATURE OF BUSINESSThe Sun International Group has interests in, and provides management services to businesses in the hotel, resort and casino industry. There has not been any material change from the nature of the Group’s business in the prior year.

EARNINGSThe results of the Group are set out in the statements of comprehensive income on page 90. The Company’s results are available online at http://ir.suninternational.com/15/.

Segmental information is set out on pages 94 to 98.

DIVIDENDSGross dividends totalling 265 cents per share (2012: 240 cents) have been declared by the directors in respect of the year under review as follows:

Interim: declared, 22 February 2013: 110 cents (97.10721 cents net of dividend withholding tax)

Final: declared, 23 August 2013: 155 cents (131.75 cents net of dividend withholding tax)

The final dividend referred to above will be accounted for in the 2014 annual financial statements as it was declared subsequent to the year end.

REVIEW OF OPERATIONS AND FUTURE DEVELOPMENTSDetailed commentary on the nature of business of the Company and its subsidiaries, acquisitions, future developments and prospects of the Group are addressed within the Chairman’s report, the Chief Executive and Management report and the financial overview as set out in the Integrated Annual Report.

SHARE CAPITALDuring the year, 642 290 ordinary shares were issued resulting

in the total issued share capital of the Company constituting of

114 129 455 ordinary shares and an authorised share capital

of 150 000 000 ordinary shares.

On 2 September 2013, 400 000 treasury shares were sold

by Sun International Investments No. 2 Limited to

Sun International Management Limited for use in the

Company’s Restricted Share Plan. This was the first year in

which the Company utilised treasury shares for purposes of

the Restricted Share Plan.

The following ordinary shares in the unissued share capital of

the Company remain under the control of the directors as a

specific authority to allot and issue as follows:

� 1 875 517 ordinary shares for purposes of the share

option scheme (discontinued in 2006)

� 10 780 000 ordinary shares for purposes of the share plans.

Details of the authorised and issued share capital appear in

note 18 to the Group financial statements.

Details of the Company’s public and non-public shareholders

are set out on page 80 of the Integrated Annual Report.

SHARE OPTIONS AND SHARE PLANSParticulars relating to options under the share option scheme

(discontinued in 2006) and awards under the share plans are

provided in note 31 to the Group financial statements.

SUBSIDIARIESParticulars relating to interests in principal subsidiaries are

available online at http://ir.suninternational.com/16/.

BORROWING CAPACITYThe Company’s borrowings are not restricted in terms of its

Memorandum of Incorporation. The Group’s debt covenants

and debt capacity appear in the financial overview on

page 24.

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DIRECTORS AND COMPANY SECRETARYThe names of the directors in office at the date of this report

appear on pages 12 and 13 and particulars of the company

secretary appear online at http://ir.suninternational.com/8/.

The secretary’s business and postal address appear on page 155.

During the year under the review, the following movements in

directorate were noted.

DirectorNature ofchange

Date ofchange

Mr DM Nurek Retired 23 November 2012

Mr G Collins Resigned 1 February 2013

Mr PDS Bacon Appointed 1 February 2013

Mr GE Stephens Appointed 1 February 2013

Mr RP Becker Resigned 28 February 2013

Mr AM Leeming Appointed 1 March 2013

In terms of the Company’s Memorandum of Incorporation,

Messrs PL Campher, IN Matthews and Ms BLM Makgabo-

Fiskerstrand are required to retire from office at the forthcoming

annual general meeting and, being eligible, offer themselves

for re-election.

Messrs PDS Bacon, AM Leeming and GE Stephens, who

were appointed to the board subsequent to the last annual

general meeting, are required in terms of the Memorandum

of Incorporation, to retire from office at the forthcoming

annual general meeting and being eligible are available for

election to the board.

As at 30 June 2013, the directors of the Company beneficially

held, directly or indirectly, 1 218 114 ordinary shares in the

issued capital of the Company, as follows:

HOLDING COMPANYThe Company has no holding or ultimate holding company.

SPECIAL RESOLUTIONS PASSED BY THE COMPANY AND ITS SUBSIDIARIESCompanyThe Company passed five special resolutions at its

annual general meeting held on 23 November 2012

relating to:

� the approval of non-executive directors annual fee increase

� approval of non-executive director fees in addition to

scheduled meetings

� approval of financial assistance in terms of S45 of the

Companies Act No. 71 of 2008

� a general authority to repurchase shares

� adoption of Sun International Limited’s Memorandum of

Incorporation.

SubsidiariesThe following material special resolutions were passed by

subsidiaries during the financial year:

� The majority of the Group’s subsidiaries adopted harmonised

Memorandums of Incorporation, by way of special resolution,

at general meetings of shareholders

� Sun International Management Limited and Sun International

(South Africa) Limited passed special resolutions at general

meetings of members for the provision of financial assistance

to related or inter-related companies.

SUBSEQUENT EVENTSThe material events that have occurred between 30 June 2013

and to the date of this report appear on page 133.

Direct Indirect 2013 2012

NN Gwagwa – 266 102* 266 102* 266 102*

AM Leeming 89 360 – 89 360 69 261

IN Matthews 2 723 – 2 723 2 723

KH Mazwai 87 824 – 87 824 94 918

MV Moosa – 598 731* 598 731* 598 731*

GE Stephens 173 374 – 173 374 81 965

Total 353 281 864 833 1 218 114 1 113 700

* Held indirectly through Lereko Investments (Pty) Limited and Dinokana (Pty) Limited.

The following changes in directors’ shareholdings have taken place since the end of the financial year and to the date of this report:

Ordinary shares acquired

GE Stephens 28 358

AM Leeming 13 137

KH Mazwai 7 688

Total 49 183


R million Notes 2013 2012

Revenue 10 267 9 494

Casino 8 195 7 645

Rooms 957 838

Food, beverage and other revenue 1 115 1 011

Benefit fund surplus – 24

Consumables and services (1 130) (1 076)

Depreciation and amortisation 2 (851) (818)

Employee costs 3 (2 256) (2 103)

Levies and VAT on casino revenue (1 917) (1 774)

Promotional and marketing costs (717) (698)

Property and equipment rentals (128) (95)

Property costs (541) (485)

Other operational costs (831) (759)

Operating profit 4 1 896 1 710

Foreign exchange profits 57 79

Interest income 5 31 37

Interest expense 6 (486) (521)

Profit before tax 1 498 1 305

Tax 7 (477) (434)

Profit for the year 1 021 871

Other comprehensive income:

Items that may be reclassified to profit or loss

Net profit on cash flow hedges 3 –

Tax on net profit on cash flow hedges (1) –

Transfer of hedging reserve to statement of comprehensive income 2 2

Foreign currency translation reserve movements 550 233

Total comprehensive income for the year 1 575 1 106

Profit for the year attributable to:Minorities 314 239

Ordinary shareholders 707 632

1 021 871

Total comprensive income for the year attributable to:Minorities 611 317

Ordinary shareholders 964 789

1 575 1 106

Earnings per shareBasic (cents per share) 9 736 669

Basic diluted (cents per share) 9 732 664

Group statements of comprehensive incomefor the year ended 30 June

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Group statements of financial positionas at 30 June


AssetsNon-current assetsProperty, plant and equipment 11 10 594 9 595

Intangible assets 12 494 479

Available-for-sale investment 13 48 48

Loans and receivables 14 13 23

Pension fund asset 15 29 38

Deferred tax 20 214 148

11 392 10 331

Current assetsLoans and receivables 14 52 38

Inventory 16 81 70

Accounts receivable 17 476 473

Tax 41 57

Cash and cash equivalents 25.7 1 023 752

1 673 1 390

Total assets 13 065 11 721

Equity and liabilitiesCapital and reservesOrdinary shareholders’ equity 2 220 1 496

Minorities’ interests 1 693 1 227

3 913 2 723

Non-current liabilitiesDeferred tax 20 501 423

Borrowings 21 3 512 4 257

Other non-current liabilities 22 440 506

4 453 5 186

Current liabilitiesAccounts payable and accruals 23 1 424 1 246

Provisions 24 48 43

Borrowings 21 3 158 2 422

Tax 69 101

4 699 3 812

Total liabilities 9 152 8 998

Total equity and liabilities 13 065 11 721


Group statements of cash flowsfor the year ended 30 June


Cash flows from operating activitiesCash receipts from customers 10 223 9 742

Cash paid to suppliers, government and employees (7 143) (7 008)

Cash generated by operations 25.1 3 080 2 734

Tax paid 25.2 (498) (531)

Cash generated by operating activities 2 582 2 203

Part settlement of long service award obligation 22 (120) –

Net cash inflow from operating activities 2 462 2 203

Cash flows from investing activitiesPurchase of property, plant and equipment

Expansion (557) (586)

Replacement (711) (514)

Purchase of intangible assets (32) (60)

Proceeds on disposal of property, plant and equipment 13 4

Investment income 31 37

Other non current loans raised/(repaid) 31 (1)

Net cash outflow from investing activities (1 225) (1 120)

Cash flows from financing activitiesPurchase of shares in subsidiaries 25.3 (73) (817)

Net (decrease)/increase in borrowings 25.4 (69) 589

Interest paid 25.5 (459) (495)

Dividends paid 25.6 (534) (506)

Increase in minority funding 80 –

Increase in share capital 32 131

Purchase of treasury shares and share options (8) (32)

Net cash outflow from financing activities (1 031) (1 130)

Effects of exchange rate changes on cash and cash equivalents 65 57

Net increase in cash and cash equivalents 271 10

Cash and cash equivalents at beginning of year 752 742

Cash and cash equivalents at end of year 25.7 1 023 752

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Group statements of changes in equityfor the year ended 30 June

R million Notes

Share capital

and premium

Treasuryshares

andshare

options

Foreigncurrency

trans-lation

reserve

Sharebased

paymentreserve

Available-for-saleinvest-

mentreserve

Hedgingreserve

Reservefor non-control-

linginterests*

Retainedearnings

Ordinaryshare-

holders’equity

Minorities’interests Total

Balance at 30 June 2011 146 (1 613) 71 193 4 (2) (1 470) 4 188 1 517 1 300 2 817

Deemed treasury shares purchased 18 (72) (72) (72)

Treasury share options purchased 18 (20) (20) (20)

Treasury share options exercised 18 61 61 61

Shares issued 18 131 131 131

Vested shares 44 (44) – –

Employee share based payments 31 33 33 33

Release of share based payment reserve (21) 21 – –

Delivery of share awards (8) (8) (8)

Acquisition of minorities’ interests 33 (736) (736) (82) (818)

Profit for the year 632 632 239 871

Other comprehensive income 157 157 78 235

Dividends paid (199) (199) (308) (507)

Balance at 30 June 2012 277 (1 600) 228 161 4 (2) (2 206) 4 634 1 496 1 227 2 723

Deemed treasury shares purchased 18 (3) (3) (3)

Treasury share options purchased 18 (34) (34) (34)

Treasury share options exercised 18 29 29 29

Shares issued 18 32 32 32

Vested shares 14 (14) – –

Employee share based payments 31 46 46 46

Release of share based payment reserve (32) 32 – –

Release of SFIR equity option reserve (75) 33 (42) 42 –

Delivery of share awards (11) (11) (11)

Acquisition of minorities’ interests 33 (13) 8 (5) 95 90

Profit for the year 707 707 314 1 021

Other comprehensive income 254 3 257 297 554

Dividends paid (252) (252) (282) (534)

Balance at 30 June 2013 309 (1 594) 482 86 4 1 (2 219) 5 151 2 220 1 693 3 913

* Reserve for non-controlling interests relate to the premium paid on purchases of minorities’ interests and profits and losses on disposals of interests to minorities.


Notes to the group financial statementsfor the year ended 30 June

Revenue EBITDA* EBITDAM*Depreciation

and amortisationOperating profit and

segment results Net interest paid Minorities interest TaxAdjusted headline

earnings*

R million 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

1. SEGMENTAL ANALYSISSouth African operations 7 788 7 298 2 217 2 030 2 703 2 487 581 582 1 586 1 415 213 193 226 180 388 330 982 869

GrandWest 1 866 1 779 789 746 882 835 94 134 691 607 21 30 128 90 179 107 491 430

Sun City 1 291 1 230 168 116 217 159 118 114 45 (2) – – – – – – 45 3

Carnival City 1 061 1 017 316 298 404 382 73 70 232 219 32 34 7 9 61 68 140 119

Sibaya 1 040 980 362 343 457 434 64 61 293 277 20 23 68 64 82 87 191 167

Boardwalk 496 451 143 147 177 182 70 47 72 99 35 3 3 15 2 25 30 79

Wild Coast Sun 389 308 67 32 89 47 40 35 26 (4) 28 23 (3) (2) 7 (16) (9) (10)

Carousel 322 312 66 60 81 75 25 23 39 37 1 1 – – – – 39 37

Meropa 292 274 113 108 142 136 17 20 96 88 7 7 19 15 26 29 64 52

Windmill 255 238 94 84 117 105 15 15 78 68 6 7 14 11 20 20 51 41

Morula 230 248 28 35 37 46 16 17 12 18 1 1 – – – – 12 19

Table Bay 181 153 22 7 31 15 11 16 2 (14) 48 48 (12) (20) – – (46) (62)

Flamingo 152 146 44 40 56 52 11 12 33 28 5 5 5 3 8 8 20 15

Golden Valley 128 128 28 33 35 40 14 17 14 16 9 11 – (1) 3 2 2 1

Maslow 41 – (6) – (5) – 11 – (29) – – – – – – – (29) –

Other operating segments 44 34 (17) (19) (17) (21) 2 1 (18) (22) – – (3) (4) – – (19) (22)

Other African operations 948 873 174 106 224 152 87 80 70 10 26 22 11 (24) 18 (1) 29 (16)

Federal Palace 198 173 40 11 52 19 32 25 8 (14) 23 18 4 (18) (21) (7) 8 (35)

Zambia 182 167 41 36 52 46 18 14 23 21 – – – – 32 8 (6) 23

Botswana 178 170 50 48 59 57 8 9 39 36 (2) (1) 6 6 9 8 29 27

Swaziland 161 149 9 (13) 15 (6) 6 8 2 (20) 2 1 1 (11) (1) (7) 2 (17)

Lesotho 118 106 16 12 22 18 13 13 3 (1) 2 2 – (1) 1 – – (4)

Kalahari Sands 111 108 18 12 24 18 10 11 (5) (12) 1 2 – – (2) (3) (4) (10)

LATAM operationMonticello 1 498 1 270 318 262 395 327 159 136 149 120 116 145 35 (13) (21) (7) 60 (20)

Management activities 610 590 244 260 244 260 22 15 196 233 – (15) 18 103 66 128 119 164

Total operating segments 10 844 10 031 2 953 2 658 3 566 3 226 849 813 2 001 1 778 355 345 290 246 451 450 1 190 997

Other (577) (537) (17) (16) (594) (553) 2 5 (105) (68) 100 139 24 (7) 26 (16) (102) (161)

Central office and other – – (17) (16) (17) (16) 2 5 (20) (25) 100 139 24 (7) 26 (16) (102) (161)

Elimination of intragroup (577) (537) – – (577) (537) – –

Other income 21 24

Other expenses (106) (67)

Total 10 267 9 494 2 936 2 642 2 972 2 673 851 818 1 896 1 710 455 484 314 239 477 434 1 088 836

OtherNet interest expense and foreign exchange profits (398) (405)

Tax (477) (434)

Minorities’ interests (314) (239) (348) (220)

10 267 9 494 2 936 2 642 2 972 2 673 851 818 707 632 455 484 314 239 477 434 740 616

* Refer to page 100 for the definition of EBITDA and EBITDAM, and page 101 for the definition of adjusted headline earnings.

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Revenue EBITDA* EBITDAM*Depreciation

and amortisationOperating profit and

segment results Net interest paid Minorities interest TaxAdjusted headline

earnings*

R million 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

1. SEGMENTAL ANALYSISSouth African operations 7 788 7 298 2 217 2 030 2 703 2 487 581 582 1 586 1 415 213 193 226 180 388 330 982 869

GrandWest 1 866 1 779 789 746 882 835 94 134 691 607 21 30 128 90 179 107 491 430

Sun City 1 291 1 230 168 116 217 159 118 114 45 (2) – – – – – – 45 3

Carnival City 1 061 1 017 316 298 404 382 73 70 232 219 32 34 7 9 61 68 140 119

Sibaya 1 040 980 362 343 457 434 64 61 293 277 20 23 68 64 82 87 191 167

Boardwalk 496 451 143 147 177 182 70 47 72 99 35 3 3 15 2 25 30 79

Wild Coast Sun 389 308 67 32 89 47 40 35 26 (4) 28 23 (3) (2) 7 (16) (9) (10)

Carousel 322 312 66 60 81 75 25 23 39 37 1 1 – – – – 39 37

Meropa 292 274 113 108 142 136 17 20 96 88 7 7 19 15 26 29 64 52

Windmill 255 238 94 84 117 105 15 15 78 68 6 7 14 11 20 20 51 41

Morula 230 248 28 35 37 46 16 17 12 18 1 1 – – – – 12 19

Table Bay 181 153 22 7 31 15 11 16 2 (14) 48 48 (12) (20) – – (46) (62)

Flamingo 152 146 44 40 56 52 11 12 33 28 5 5 5 3 8 8 20 15

Golden Valley 128 128 28 33 35 40 14 17 14 16 9 11 – (1) 3 2 2 1

Maslow 41 – (6) – (5) – 11 – (29) – – – – – – – (29) –

Other operating segments 44 34 (17) (19) (17) (21) 2 1 (18) (22) – – (3) (4) – – (19) (22)

Other African operations 948 873 174 106 224 152 87 80 70 10 26 22 11 (24) 18 (1) 29 (16)

Federal Palace 198 173 40 11 52 19 32 25 8 (14) 23 18 4 (18) (21) (7) 8 (35)

Zambia 182 167 41 36 52 46 18 14 23 21 – – – – 32 8 (6) 23

Botswana 178 170 50 48 59 57 8 9 39 36 (2) (1) 6 6 9 8 29 27

Swaziland 161 149 9 (13) 15 (6) 6 8 2 (20) 2 1 1 (11) (1) (7) 2 (17)

Lesotho 118 106 16 12 22 18 13 13 3 (1) 2 2 – (1) 1 – – (4)

Kalahari Sands 111 108 18 12 24 18 10 11 (5) (12) 1 2 – – (2) (3) (4) (10)

LATAM operationMonticello 1 498 1 270 318 262 395 327 159 136 149 120 116 145 35 (13) (21) (7) 60 (20)

Management activities 610 590 244 260 244 260 22 15 196 233 – (15) 18 103 66 128 119 164

Total operating segments 10 844 10 031 2 953 2 658 3 566 3 226 849 813 2 001 1 778 355 345 290 246 451 450 1 190 997

Other (577) (537) (17) (16) (594) (553) 2 5 (105) (68) 100 139 24 (7) 26 (16) (102) (161)

Central office and other – – (17) (16) (17) (16) 2 5 (20) (25) 100 139 24 (7) 26 (16) (102) (161)

Elimination of intragroup (577) (537) – – (577) (537) – –

Other income 21 24

Other expenses (106) (67)

Total 10 267 9 494 2 936 2 642 2 972 2 673 851 818 1 896 1 710 455 484 314 239 477 434 1 088 836

OtherNet interest expense and foreign exchange profits (398) (405)

Tax (477) (434)

Minorities’ interests (314) (239) (348) (220)

10 267 9 494 2 936 2 642 2 972 2 673 851 818 707 632 455 484 314 239 477 434 740 616

* Refer to page 100 for the definition of EBITDA and EBITDAM, and page 101 for the definition of adjusted headline earnings.


Notes to the group financial statements continued

Casino Tables Slots Rooms Food and Beverage Other Total

R million 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

1. SEGMENTAL REVENUE ANALYSIS continuedSouth African operations 6 457 6 144 879 842 5 578 5 302 652 558 336 319 343 277 7 788 7 298

GrandWest 1 834 1 750 226 222 1 608 1 528 1 1 – – 31 28 1 866 1 779

Sun City 446 431 83 87 363 344 430 414 210 224 205 161 1 291 1 230

Sibaya 1 011 950 206 196 805 754 12 11 7 8 10 11 1 040 980

Carnival City 1 031 991 163 144 868 847 3 3 – – 27 23 1 061 1 017

Boardwalk 476 443 41 40 435 403 10 – – – 10 8 496 451

Wild Coast Sun 294 252 35 29 259 223 24 8 37 27 34 21 389 308

Carousel 311 300 27 27 284 273 4 4 – – 7 8 322 312

Meropa 289 271 31 32 258 239 – – – – 3 3 292 274

Windmill 254 237 33 30 221 207 – – – – 1 1 255 238

Morula 215 229 16 15 199 214 3 2 9 15 3 2 230 248

Flamingo 150 144 11 12 139 132 – – – – 2 2 152 146

Golden Valley 125 125 7 8 118 117 2 2 – – 1 1 128 128

Table Bay – – – – – – 133 112 42 38 6 3 181 153

Maslow – – – – – – 20 – 20 – 1 – 41 –

Other operating segments 21 21 – – 21 21 10 1 11 7 2 5 44 34

Other African operations 385 349 78 77 307 272 303 279 219 216 41 29 948 873

Federal Palace 80 60 18 19 62 41 69 66 44 43 5 4 198 173

Zambia – – – – – – 102 100 60 57 20 10 182 167

Botswana 103 98 15 18 88 80 44 41 29 29 2 2 178 170

Swaziland 80 71 22 16 58 55 36 32 39 39 6 6 161 149

Lesotho 47 43 12 11 35 32 31 28 33 29 7 7 118 106

Kalahari Sands 75 77 11 13 64 64 21 12 14 19 1 – 111 108

LATAM operationMonticello 1 353 1 152 369 328 984 824 2 1 103 84 40 33 1 498 1 270

Management activities 610 590 610 590

Total operating segments 8 195 7 645 1 326 1 247 6 869 6 398 957 838 658 619 1 034 929 10 844 10 031

Other – – – – – – – – – – (577) (537) (577) (537)

Elimination of intragroup (577) (537) (577) (537)

Total 8 195 7 645 1 326 1 247 6 869 6 398 957 838 658 619 457 392 10 267 9 494

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Casino Tables Slots Rooms Food and Beverage Other Total

R million 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012

1. SEGMENTAL REVENUE ANALYSIS continuedSouth African operations 6 457 6 144 879 842 5 578 5 302 652 558 336 319 343 277 7 788 7 298

GrandWest 1 834 1 750 226 222 1 608 1 528 1 1 – – 31 28 1 866 1 779

Sun City 446 431 83 87 363 344 430 414 210 224 205 161 1 291 1 230

Sibaya 1 011 950 206 196 805 754 12 11 7 8 10 11 1 040 980

Carnival City 1 031 991 163 144 868 847 3 3 – – 27 23 1 061 1 017

Boardwalk 476 443 41 40 435 403 10 – – – 10 8 496 451

Wild Coast Sun 294 252 35 29 259 223 24 8 37 27 34 21 389 308

Carousel 311 300 27 27 284 273 4 4 – – 7 8 322 312

Meropa 289 271 31 32 258 239 – – – – 3 3 292 274

Windmill 254 237 33 30 221 207 – – – – 1 1 255 238

Morula 215 229 16 15 199 214 3 2 9 15 3 2 230 248

Flamingo 150 144 11 12 139 132 – – – – 2 2 152 146

Golden Valley 125 125 7 8 118 117 2 2 – – 1 1 128 128

Table Bay – – – – – – 133 112 42 38 6 3 181 153

Maslow – – – – – – 20 – 20 – 1 – 41 –

Other operating segments 21 21 – – 21 21 10 1 11 7 2 5 44 34

Other African operations 385 349 78 77 307 272 303 279 219 216 41 29 948 873

Federal Palace 80 60 18 19 62 41 69 66 44 43 5 4 198 173

Zambia – – – – – – 102 100 60 57 20 10 182 167

Botswana 103 98 15 18 88 80 44 41 29 29 2 2 178 170

Swaziland 80 71 22 16 58 55 36 32 39 39 6 6 161 149

Lesotho 47 43 12 11 35 32 31 28 33 29 7 7 118 106

Kalahari Sands 75 77 11 13 64 64 21 12 14 19 1 – 111 108

LATAM operationMonticello 1 353 1 152 369 328 984 824 2 1 103 84 40 33 1 498 1 270

Management activities 610 590 610 590

Total operating segments 8 195 7 645 1 326 1 247 6 869 6 398 957 838 658 619 1 034 929 10 844 10 031

Other – – – – – – – – – – (577) (537) (577) (537)

Elimination of intragroup (577) (537) (577) (537)

Total 8 195 7 645 1 326 1 247 6 869 6 398 957 838 658 619 457 392 10 267 9 494



Assets Borrowings Liabilities Capital expenditure

R million 2013 2012 2013 2012 2013 2012 2013 2012

1. SEGMENTAL ANALYSIS continuedSouth African operations 7 326 6 754 3 113 2 739 1 215 1 054 1 122 1 014

GrandWest 1 164 1 184 380 303 177 171 68 54

Sun City 1 583 1 583 – – 303 262 152 116

Sibaya 713 716 318 304 136 125 61 33

Carnival City 673 616 539 461 207 129 130 28

Boardwalk 1 116 888 708 461 69 85 312 466

Wild Coast Sun 547 551 343 343 96 85 31 181

Carousel 349 317 – – 62 45 57 25

Meropa 160 158 118 110 31 24 16 12

Windmill 239 208 162 124 26 31 14 14

Morula 126 126 – – 37 46 33 11

Flamingo 89 95 66 71 15 16 7 11

Golden Valley 179 185 135 142 17 19 8 8

Table Bay 102 103 344 420 31 16 12 8

Maslow 259 – – – 8 – 217 44

Other operating segments 27 24 – – – – 4 3

Other African operations 1 602 1 423 354 292 278 252 53 65

Federal Palace 715 595 324 257 96 88 9 6

Zambia 443 391 – – 38 35 26 23

Botswana 146 131 2 3 25 27 5 11

Swaziland 69 70 23 24 33 36 2 1

Lesotho 107 115 4 6 29 25 5 8

Kalahari Sands 122 121 1 2 57 41 6 16

LATAM operationMonticello 2 494 2 198 498 627 244 198 92 25

Management activities 745 775 409 136 472 378 33 46

Total operating segments 12 167 11 150 4 374 3 794 2 209 1 882 1 300 1 150

Other 643 366 2 296 2 885 (297) (87) – –

Central office and other 643 366 2 057 2 655 110 122 – –Employee share trust 239 230

Elimination of intragroup (407) (209)

Total 12 810 11 516 6 670 6 679 1 912 1 795 1 300 1 150

OtherTax 41 57 69 101

Deferred tax 214 148 501 423

Borrowings 6 670 6 679

13 065 11 721 6 670 6 679 9 152 8 998 1 300 1 150

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2. DEPRECIATION AND AMORTISATIONProperty, plant and equipment (refer to note 11) (790) (757)

Intangible assets (refer to note 12) (61) (61)

(851) (818)

3. EMPLOYEE COSTSSalaries, wages, bonuses and other benefits (2 032) (1 797)

Pension costs – defined contribution plans (173) (179)

– defined benefit plans surplus recognition (refer to note 15) (9) 3

Other benefits: long service award (refer to note 22) 1 (77)

post retirement (refer to note 22) 9 (20)

farewell gift (refer to note 22) (6) –

Employee share based payments (refer to note 31) (46) (33)

(2 256) (2 103)

Number of employees at the end of the year 11 521 11 368

Permanent core employees 9 450 9 512

Permanent scheduled employees 1 599 1 354

Temporary employees 472 502

4. OPERATING PROFIT IS STATED AFTER CHARGING THE FOLLOWING:Operating lease charges

Plant, vehicles and equipment (35) (25)

Auditors’ remuneration (22) (18)

Audit fees (16) (14)

Fees for other services (5) (3)

Expenses (1) (1)

Professional fees (42) (43)

Net loss on disposal of property, plant and equipment – (1)

5. INTEREST INCOMEInterest earned on cash and cash equivalents 29 35

Preference share dividends 1 1

Tax authorities 1 1

31 37

6. INTEREST EXPENSEInterest paid on borrowings (282) (300)Preference share dividends (189) (212)Imputed interest on loans payable (21) (15)Transfer from hedging reserve (2) (2)Fair value of derivative financial instruments (4) (9)Tax authorities (1) –Capitalised to property, plant and equipment 13 17

(486) (521)



R million 2013 2012

7. TAXNormal tax – South African (455) (417) – foreign 4 8

(451) (409)

Current tax – current year (461) (467) – prior years (10) (10)Deferred tax – current year 4 34 – prior years 16 34

STC – (62)CGT – 46Other taxes (26) (9)

(477) (434)

Effect of tax losses not recognised as deferred tax assets 41 34Unutilised STC credits – 66

Reconciliation of rate of tax % %

Standard rate – South African 28.0 28.0Adjusted for:Disallowable expenses 0.8 4.0Exempt income (0.4) (1.7)Preference shares dividends 2.9 3.6Foreign tax rate variations (0.8) (0.8)Prior year over-provisions (0.4) (1.8)STC – 4.8Release of CGT on share premium distributions – (3.5)Other taxes 1.7 0.7

Effective tax rate 31.8 33.3

8. EBITDA RECONCILIATIONOperating profit 1 896 1 710Expropriation of land – Monticello – 6Depreciation and amortisation 851 818Property and equipment rental 104 71Pre-opening Maslow lease rentals 24 24Benefit fund surplus recognition – (24)Net loss on disposal and impairment of property, plant and equipment – 1Employee benefits (15) –Retrenchment costs – 9Pre-opening expenses 37 3Other 4 –Reversal of Employee Share Trusts’ consolidation* 35 24

EBITDA 2 936 2 642

* The consolidation of the Employee Share Trusts are reversed as the Group does not receive the economic benefits of these trusts.

EBITDA: Earnings before interest, tax, depreciation and amortisation. EBITDA is stated before property and equipment rentals and items adjusted for adjusted headline earnings. Property and equipment rentals are considered to be a form of funding and are therefore categorised after EBITDA with depreciation and interest.

EBITDAM: EBITDA before management fees.

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R million 2013 2012

9. EARNINGS PER SHAREProfit attributable to ordinary shareholders 707 632

Headline earnings adjustmentsNet loss on disposal and impairment of property, plant and equipment – 1

Headline earnings 707 633

Adjusted headline earnings adjustments 12 (27)

Pre-opening expenses 37 3

Expropriation of land – Monticello – 6

Benefit fund surplus recognition – (24)

Retrenchment costs – 9

Pre-opening Maslow lease rentals 24 24

Employee benefits (15) –

Other 4 –

Foreign exchange profits on intercompany loans (38) (45)

Tax relief on the above items (1) 8

CGT – (46)

Tax on termination of management contract – (22)

Minorities’ interests on the above items (2) 49

Reversal of Employee Share Trusts’ consolidation 24 21

Adjusted headline earnings 740 616

Number of shares for diluted EPS calculation (000’s)Weighted average number of shares in issue 96 016 94 437

Adjustment for dilutive share awards 521 770

Diluted weighted average number of shares in issue 96 537 95 207

Number of shares for diluted adjusted HEPS calculation (000’s)Weighted average number of shares in issue 96 016 94 437

Weighted deemed treasury shares 1 085 614

Weighted treasury shares held by Employee Share Trusts 5 890 5 890

Adjusted weighted average number of shares in issue 102 991 100 941

Adjustment for dilutive share options 521 770

Diluted adjusted weighted average number of shares in issue 103 512 101 711

Earnings per share (cents)Basic 736 669

Headline 736 670

Adjusted headline 719 610

Diluted earnings per share (cents)Basic 732 664

Headline 732 665

Adjusted headline 715 606

Earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue.

Adjusted headline earnings include adjustments made for certain items of income or expense. These adjustments include pre-opening expenses and material items considered to be outside the normal operating activities of the Group and/or of a non-recurring nature.

For the diluted earnings per share calculation the weighted average number of ordinary shares in issue is adjusted to take account of potential dilutive share options granted to employees. The number of shares taken into account is determined by taking the number of shares that could have been acquired at fair value based on the monetary value of the subscription rights attached to the outstanding share options and awards. This calculation is done to determine the ‘unpurchased’ shares to be added to the ordinary shares outstanding for the purpose of computing the dilution.



R million 2013 2012

10. DIVIDENDS PAIDA final dividend of 150 cents per share for the year ended 30 June 2012 was declared on 24 August 2012 and paid on 25 September 2012. (145)

An interim dividend of 110 cents per share for the year ended 30 June 2013 was declared on 22 February 2013 and paid on 25 March 2013. (107)

A final dividend of 120 cents per share for the year ended 30 June 2011 was declared on 26 August 2011 and paid on 26 September 2011. (110)

An interim dividend of 90 cents per share for the year ended 30 June 2012 was declared on 24 February 2012 and paid on 26 March 2012. (89)

(252) (199)

A final gross dividend of 155 cents per share for the year ended 30 June 2013 was declared on 26 August 2013 and paid on 23 September 2013. The Company has no STC credits available and these dividends are therefore subject to the 15% withholding tax, resulting in a net dividend of 131.75 cents per share.

11. PROPERTY, PLANT AND EQUIPMENTNet carrying valueFreehold land and buildings 5 541 4 742

Leasehold land and buildings 1 536 1 291

Infrastructure 957 877

Plant and machinery 494 411

Equipment 1 229 1 149

Furniture and fittings 413 344

Vehicles 37 26

Operating equipment 179 153

Capital work in progress 208 602

10 594 9 595

Cost

2013R million Opening

Reclassi-fications

Exchangerate

adjustments Additions

Disposalsand

OE usage Closing

Asset typeFreehold land and buildings 5 721 508 418 34 (1) 6 680Leasehold land and buildings 1 990 128 65 141 (105) 2 219Infrastructure 1 295 54 65 19 (27) 1 406Plant and machinery 942 78 42 43 (68) 1 037Equipment 3 147 135 106 287 (402) 3 273Furniture and fittings 1 112 69 40 52 (293) 980Vehicles 76 1 2 21 (15) 85Operating equipment 153 6 8 68 (56) 179Capital work in progress 602 (998) 3 603 (2) 208

15 038 (19) 749 1 268 (969) 16 067

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11. PROPERTY, PLANT AND EQUIPMENT continuedAccumulated depreciation


Reclassi-fications

Exchangerate

adjustments

Depre-ciation on

disposalsDepre-ciation Closing

Asset typeFreehold land and buildings (979) – (41) 1 (120) (1 139)Leasehold land and buildings (699) – (9) 104 (79) (683)Infrastructure (418) – (8) 27 (50) (449)Plant and machinery (531) – (15) 68 (65) (543)Equipment (1 998) 9 (62) 395 (388) (2 044)Furniture and fittings (768) – (16) 293 (76) (567)Vehicles (50) – (1) 15 (12) (48)

(5 443) 9 (152) 903 (790) (5 473)

Cost


Reclassi-fications

Exchangerate

adjustments Additions

Disposalsand

OE usage

Disclosedas held forsale in theprior year Closing

Asset typeFreehold land and buildings 5 334 18 308 13 (1) 49 5 721

Leasehold land and buildings 1 811 5 9 168 (3) – 1 990

Infrastructure 1 148 5 47 88 (1) 8 1 295

Plant and machinery 854 15 30 35 (3) 11 942

Equipment 2 749 175 72 171 (61) 41 3 147

Furniture and fittings 1 007 16 34 42 (13) 26 1 112

Vehicles 62 1 2 14 (4) 1 76

Operating equipment 143 – 8 44 (48) 6 153

Capital work in progress 347 (273) 3 525 – – 602

13 455 (38) 513 1 100 (134) 142 15 038

Accumulated depreciation


Reclassi-fications

Exchangerate

adjustments

Depre-ciation on

disposalsDepre-ciation

Disclosedas held forsale in theprior year Closing

Asset typeFreehold land and buildings (807) 7 (35) – (122) (22) (979)

Leasehold land and buildings (640) – (2) 2 (59) – (699)

Infrastructure (359) (5) (5) 1 (45) (5) (418)

Plant and machinery (442) – (9) 3 (80) (3) (531)

Equipment (1 623) – (32) 57 (369) (31) (1 998)

Furniture and fittings (672) (2) (16) 12 (73) (17) (768)

Vehicles (44) – (1) 4 (9) – (50)

(4 587) – (100) 79 (757) (78) (5 443)

Net carrying value of property, plant and equipment of R107 million (2012: R116 million) is held under finance leases and relates mainly to equipment.

A copy of the register of properties is available for inspection by members of the public at the registered office of the Company.

Borrowing costs of R13 million (2012: R17 million) were capitalised during the year and are included in ‘Additions’ above. The capitalisation rates used of 6.5% and 7.8% were equal to the specific borrowing costs of the loans used to finance the relevant projects.

Included in freehold land and buildings and infrastructure are assets of R1 739 million (2012: R1 717 million) where the residual value is deemed to approximate the carrying value.



R million 2013 2012

12. INTANGIBLE ASSETSNet carrying valueComputer software 67 70

Sun International name 72 72

Bid costs 130 156

Management contracts 4 4

Goodwill 120 88

Lease premiums 15 16

Restraint of trade 2 7

Capital work in progress 84 66

494 479

Cost

2013R million

Openingbalance Additions Disposals

Reclassi-fication

Exchangerate

adjustmentsClosingbalance

Asset typeComputer software 159 14 (12) 19 2 182Sun International name 72 – – – – 72Bid costs 579 – – – 3 582Management contracts 5 – – – – 5Goodwill 196 – – – 32 228Lease premiums 37 – – – – 37

Restraint of trade 10 – – – – 10Capital work in progress 66 18 – – – 84

1 124 32 (12) 19 37 1 200

Accumulated amortisation and impairments

R millionOpeningbalance Amortisation Disposals

Reclassi-fication

Exchangerate


Asset typeComputer software (89) (27) 11 (9) (1) (115)Bid costs (423) (28) – – (1) (452)Management contracts (1) – – – – (1)Goodwill (108) – – – – (108)Lease premiums (21) (1) – – – (22)Restraint of trade (3) (5) – – – (8)

(645) (61) 11 (9) (2) (706)

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12. INTANGIBLE ASSETS continuedCost

2012R million

Openingbalance Additions Disposals

Reclassi-fication

Exchangerate


Asset typeComputer software 138 12 (1) 10 – 159

Sun International name 72 – – – – 72

Bid costs 577 – – – 2 579

Management contracts 5 – – – – 5

Goodwill 196 – – – – 196

Lease premiums 35 – – – 2 37

Restraint of trade – 10 – – – 10

Capital work in progress – 38 – 28 – 66

1 023 60 (1) 38 4 1 124

Accumulated amortisation and impairments

R millionOpeningbalance Amortisation Disposals

Exchangerate

adjustments Closing

Asset typeComputer software (57) (31) 1 (2) (89)

Bid costs (397) (26) – – (423)

Management contracts (1) – – – (1)

Goodwill (108) – – – (108)

Lease premiums (20) (1) – – (21)

Restraint of trade – (3) – – (3)

(583) (61) 1 (2) (645)

Sun International nameThe Sun International name is classified as an indefinite life intangible asset as the Group believes that it will benefit from the name for an indefinite period. The name was tested for impairment by discounting five years of projected cash flows on relevant operations and management contracts. Discount rates were based on the risk free rate of the appropriate country, a standard risk premium and a country risk premium and ranged from 7% to 13%. In determining the growth rates applied in the impairment calculations, consideration was given to the location of the businesses, including economic and political facts and circumstances. Based on these calculations, there is no indication of impairment.

GoodwillThe goodwill relates to the acquisition of SFIR on 20 August 2008. Goodwill comprises intellectual property and the casino licence. Goodwill was tested for impairment by performing a ‘value-in-use’ valuation by applying a discount rate that ranges from 8% – 12%. The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimate growth rates stated above. Local territory tax rates were applied and a terminal growth rate based on local inflation plus a premium. The difference between the ‘value-in-use’ valuation and the net asset value of the cash generating unit (including goodwill) is R26 million.



R million 2013 2012

13. AVAILABLE-FOR-SALE INVESTMENTCape Town International Convention Centre Company (Proprietary) Limited (CTICC)

Balance at beginning and end of year 48 48

Directors’ valuation 48 48

The 24.8% (2012: 24.8%) investment in the unlisted CTICC was part of the Group’s bid commitments in the Western Cape. The investment was stated at fair value based on the latest available statutory financial statements, prepared on a going concern basis and in accordance with IFRS, of the CTICC being 30 June 2012. The Group has no significant influence over the company, therefore the investment was designated as available-for-sale.

The available-for-sale asset has been classified as level 3.

14. LOANS AND RECEIVABLESPreference share funding of empowerment partners 11 18

Guarantee deposits 15 16

Other loans 4 4

30 38

Current portion (28) (25)

2 13

Derivative financial instruments

Foreign exchange contracts (FECs) 35 23


11 10

13 23

Loans and receivables are due over the following periods:

Less than 1 year 52 38

1 – 2 years 8 16

2 – 3 years 3 3

3 – 4 years 2 3

4 years and onwards – –

65 60

% %

The weighted average interest and dividend rates were as follows:

Preference share funding of empowerment partners* 6.3 6.5

Other loans 3.8 4.4

Weighted average 5.6 6.2

* These rates are linked to the prime bank overdraft rate.

The preference share funding of empowerment partners and other loans are fully performing. Credit risk arising from the preference share funding is regarded as low as the loans will be repaid through dividend flows. The preference share funding of empowerment partners, guarantee deposits and other loans are held at amortised cost.

The fair value of loans and receivables approximates their carrying value.

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R million 2013 2012

15. RETIREMENT BENEFIT INFORMATIONValuation in terms of the Financial Services Board guidelinesA valuation of the defined benefit fund was carried out on 1 July 2010 by an independent firm of consulting actuaries and was approved by the FSB in January 2012. The fund was found to have a surplus of R225 million, of which R80 million has been designated as a solvency reserve by the trustees in terms of circular PF 117 issued by the Financial Services Board (FSB). Any allocation of assets to contingency reserves reduces the amount of surplus available for distribution to former members and other stakeholders. The Group carries out statutory actuarial valuations every three years, with the 1 July 2013 valuation having commenced.

Present value of funded obligations (278) (278)

Fair value of fund assets 503 503

Surplus before contingency reserve 225 225

Contingency reserve (80) (80)

Employer surplus account (22) (22)

Surplus 123 123

IAS 19 valuationThe surplus calculated in terms of IAS 19: Employee Benefits is presented below. It should be noted that this valuation is performed on a different basis to the valuation in terms of the FSB guidelines.

The amount recognised in the statement of financial position is determined as follows:

Present value of funded obligations (316) (321)

Balance at beginning of year (321) (290)

Current service cost (5) (4)

Interest cost (26) (25)

Contributions by plan participants (1) (2)

Actuarial gain/(loss) 25 (18)

Benefits paid 12 18

Fair value of plan assets 676 545

Balance at beginning of year 545 501

Expected return on plan assets 44 43

Actuarial gain 98 17

Contributions by plan participants 1 2

Benefits paid (12) (18)

Present value of retirement benefit surplus 360 224

Less: application of asset ceiling (331) (186)

Pension fund asset 29 38

In applying the asset ceiling the present value of the retirement benefit surplus that may be recognised as an asset is limited to the lower of the amount as determined above or the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan plus any cumulative unrecognised net actuarial losses and past service costs.

The present value of the retirement surplus of the fund for the current and prior years is as follows:

R million 2013 2012 2011 2010 2009

Present value of funded obligations (316) (321) (290) (249) (237)

Fair value of plan assets 676 545 501 454 396

Surplus 360 224 211 205 159

Experience adjustment on plan obligations (8%) 6% 10% (1%) (5%)

Experience adjustment on plan assets 14% 3% 4% 7% (12%)



R million 2013 2012

15. RETIREMENT BENEFIT INFORMATION continuedThe amounts recognised in the statement of comprehensive income are as follows:

Current service cost 5 4

Interest cost 26 25

Expected return on plan assets (44) (43)

Net actuarial (gain)/loss (123) 1

Effect of asset ceiling 145 10

Surplus (refer to note 3) 9 (3)

The expected return on assets is calculated using the discount rate at the start of the period of 8.25% per annum rather than a “best estimate” return assumption based on actual assets in which the fund invested.

The actual return on plan assets was R142 million (2012: R60 million) made up of the expected return of R44 million (2012: R43 million) and actuarial gains of R98 million (2012: R17 million).

The principal actuarial assumptions used were as follows:

Discount rate 9.00% 8.25%

Inflation rate 6.00% 5.75%

Expected return on plan assets 9.00% 8.25%

Future salary increases 7.50% 7.25%

Future pension increases 6.00% 5.75%

The average life expectancy in years of an employee retiring at age 60 at 30 June 2013 and of a member retiring at age 60, 20 years after the statement of financial position date are as follows:

Male 19.4 19.4

Female 24.2 24.2

Mortality rates are assumed to be in accordance with the following standard tables:

Before retirement:SA1985-90 Ultimate table for males and females

After retirement:PA 90 rated down two years for males and females

Plan assets comprise:Listed equity investments 76% 63%

Bonds 19% 21%

Other 5% 16%

Pension plan assets include the Company’s ordinary shares with a fair value of R3.5 million (2012: R3.3 million).

The expected return on plan assets has been set equal to the discount rate used to value the defined benefit obligations of the fund.

The fund has an amount of R21 million allocated to the employee surplus account that is currently being utilised towards a contribution holiday, which is expected to last for at least one year.

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R million 2013 2012

16. INVENTORYMerchandise 25 22

Consumables and hotel stocks 56 48

81 70

17. ACCOUNTS RECEIVABLEFinancial instrumentsTrade receivables 212 155

Less impairment (13) (16)

Net trade receivables 199 139

Other receivables 113 149

312 288

Non-financial instrumentsPrepayments 119 131

VAT 45 54

476 473

The fair value of accounts receivables approximates their carrying value.

The Group has reduced the provision by R3 million (2012: R8 million) for the impairment of its trade receivables during the year ended 30 June 2013. The Group has not utilised the provision for impaired receivables during the year ended 30 June 2013 (2012: Rnil). The decrease of the provision for impaired receivables has been included in other operational costs in the statements of comprehensive income.

Other receivables are expected to be fully recoverable based on historical recoverability. The trade receivables which are fully performing relate to customers that have a good track record with the Company in terms of recoverability.

The aging of trade receivables at the reporting date was:

2013 2012

R million Gross Impairment Gross Impairment

Fully performing 111 – 70 –

Past due by 1 to 30 days 42 – 28 –

Past due by 31 to 60 days 14 – 24 (2)

Past due by 61 to 90 days 7 – 6 (1)

Past due by more than 90 days 38 (13) 27 (13)

212 (13) 155 (16)



R million 2013 2012

18. SHARE CAPITAL AND PREMIUMAuthorised150 000 000 (2012:150 000 000) ordinary shares of 8 cents each 12 12

100 000 000 (2012:100 000 000) variable rate cumulative redeemable preference shares of 1 cent each 1 1

Issued*Share capital 9 9

Share premium 300 268

Treasury shares and share options (1 594) (1 600)

(1 285) (1 323)

* The issued preference shares have been included in borrowings in note 21.

All issued shares are fully paid.

642 290 treasury share options were exercised during the year (2012: 2 053 988 shares). There were no disposals of shares (2012: nil) indirectly held by the Employee Share Trusts through Dinokana. 149 361 RSP and CSP (2012: 831 273) shares were purchased during the year under review and 110 342 (2012: 2 174) RSP shares were disposed.

1 875 517 shares in the unissued share capital of the Company remain under the control of the directors as a specific authority in terms of section 38(1) of the Companies Act to allot and issue in accordance with the share option scheme. 10 780 000 shares were placed under the specific control of the directors to allot and issue in accordance with the EGP, CSP, DBP and RSP.

2013 2012

Number Numberof shares Rm of shares Rm

Movement during the yearStatutory shares in issue 114 129 455 309 113 487 165 277

Balance at beginning of year 113 487 165 277 111 095 130 146

Exercise of treasury share options 642 290 32 2 053 988 124

Shares issued – – 338 047 7

Treasury shares and share options (17 468 892) (1 594) (17 583 693) (1 600)

Balance at beginning of year (17 583 693) (1 600) (17 218 464) (1 613)

Deemed treasury shares purchased (149 361) (3) (831 273) (72)

Treasury share options exercised – 29 – 61

Treasury shares disposed 110 342 – 2 174 –

Treasury share options purchased – (34) – (20)

Vested shares 153 820 14 463 870 44

Closing balance 96 660 563 (1 285) 95 903 472 (1 323)

Treasury shares and share optionsHeld by subsidiary 10 549 477 1 107 10 549 477 1 107

Deemed treasury shares and share options 1 029 314 222 1 144 115 228

Held by Employee Share Trusts 5 890 101 265 5 890 101 265

17 468 892 1 594 17 583 693 1 600

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R million 2013 2012

19. RETAINED EARNINGSRetained earnings at the end of the year comprise:

Company 3 710 3 155

Subsidiaries and equity investments 1 441 1 479

5 151 4 634

20. DEFERRED TAXBalance at beginning of year 275 348

Credited to the statement of comprehensive income (4) (34)

Prior year over provision (16) (34)

Adjustment due to rate change 1 –

Currency translation adjustments 30 (5)

Charged directly to other comprehensive income 1 –

Balance at end of year 287 275

Deferred tax arises from the following temporary differences:

Deferred tax liabilitiesAccelerated asset allowances

Balance at beginning of year 597 560

Reclassified from fair value adjustments 4 –

Reclassified to disallowed accruals and provisions – 47

Currency translation adjustments 47 10

Charged/(credited) to statement of comprehensive income 35 (20)

683 597

To be recovered after more than 12 months 576 206

To be recovered within 12 months 107 391



R million 2013 2012

20. DEFERRED TAX continuedDeferred tax assetsAssessable losses (261) (174)


Currency translation adjustments (40) (15)

Adjustment due to rate change 1 –

Credited to statement of comprehensive income (48) (34)

Disallowed accruals and provisions (152) (133)


Currency translation adjustments 3 –

Reclassification from fair value adjustments (13) –

Reclassification from PPE – (47)

Credited to statement of comprehensive income (9) (17)

Fair value adjustments 17 (15)


Reclassification to disallowed accruals and provisions 13 –

Reclassfication to PPE (4) –

Currency translation adjustments 20 –

Charged directly to other comprehensive income 1 –

Charged to statement of comprehensive income 2 3

(396) (322)

To be recovered after more than 12 months (108) (90)

To be recovered within 12 months (288) (232)

Aggregate assets and liabilities on subsidiary company basis:Deferred tax assets (214) (148)

Deferred tax liabilities 501 423

Net deferred tax liability 287 275

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R million 2013 2012

21. BORROWINGSNon-current

Term facilities 1 113 1 136

V&A loan 329 334

Redeemable preference shares 2 002 2 686

Lease liabilities 17 55

Vacation Club members 51 46

3 512 4 257

CurrentShort-term banking facilities 2 549 1 892

Term facilities 213 101

Redeemable preference shares 4 5

Lease liabilities 63 47

V&A loan 5 –

Minority shareholder loans 324 377

3 158 2 422

Total borrowings 6 670 6 679

Secured 483 528

Unsecured 6 187 6 151

6 670 6 679

The fair value of borrowings approximate their carrying values except for the V&A loan which has a fair value of R387 million (2012: R399 million). The fair value has been determined on a discounted cash flow basis using a discount rate of 9% (2012: 9%).

The carrying amounts of the borrowings are denominated in the following currencies:

US Dollar 727 764

Chilean Peso 95 120

South African Rand 5 848 5 795

6 670 6 679

Lease liabilities are secured as the rights to the leased asset revert to the lessor in event of default.

Net book value of property, plant and equipment encumbered by secured loans 2 442 3 436

The borrowings are repayable as follows:

6 months or less 300 450

6 months – 1 year 2 858 1 972

1 – 2 years 1 151 771

2 – 3 years 633 893

3 – 4 years 1 197 1 309

4 years and onwards 531 1 284

6 670 6 679



R million 2013 2012

21. BORROWINGS continuedInterest ratesAverage year end interest and dividend rates are as follows:

Short-term banking facilities 6.6% 7.1%

Term facilities 7.6% 7.7%

V&A loan 12.2% 12.2%

Redeemable preference shares 6.9% 7.0%

Lease liabilities 9.1% 9.3%

Vacation Club Members 10.9% 10.9%

Minority shareholders’ loans 5.0% 6.1%

Weighted average 7.2% 7.4%

As at 30 June 2013, interest rates on 27% (2012: 11%) of the Group’s borrowings were fixed. 78% (2012: 59%) of these fixed borrowings were for periods longer than 12 months. The interest rates other than on the V&A loan, approximate those currently available to the Group in the market.

Redeemable preference sharesSIL 417 1 111

SISA 1 350 1 350

Dinokana 239 230

2 006 2 691

Preference dividends on the SIL preference shares are payable semi-annually on 31 March and 30 September and are calculated at a rate of 77% (2012: 74%) of the bank prime overdraft rate. The preference shares are redeemable on 1 August 2015.

Preference dividends on the SISA preference shares are payable semi-annually on 31 August and 28 February and are calculated at an average rate of 6.8% (2012: 7.0%). The preference shares are redeemable in October 2014, December 2014 and December 2016.

Preference dividends on the Dinokana preference shares are payable semi-annually on 31 March and 30 September and are calculated at a rate of 91.3% (2012: 91.3%) of the bank prime overdraft. The preference shares are redeemable on 3 December 2014.

The V&A lease agreement commenced on 7 December 1995. This is a 25 year agreement whereby the interest rate was locked in at inception.

A register of non current borrowings is available for inspection at the registered office of the Company.

The Group had unutilised borrowing facilities of R527 million (2012: R1 110 million) at 30 June 2013. All undrawn borrowing facilities are renewable annually and none have a fixed interest rate.

Capitalised lease liabilitiesFinance lease liabilities are primarily for buildings and slot machines. At the time of entering into the capital lease arrangements, the commitments are recorded at the present value using applicable interest rates. The aggregate amounts of minimum lease payments and the related imputed interest under the capitalised lease contracts payable in each of the next five financial years and thereafter are as follows:

2013 2012

Gross minimum lease paymentsNo later than 1 year 63 47

Later than 1 year and no later than 5 years 22 57

85 104

Imputed interestNo later than 1 year – –

Later than 1 year and no later than 5 years (5) (2)

(5) (2)

Net capital payments of finance lease liabilities 80 102

Net carrying value of assets held under finance leases 107 116

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R million 2013 2012

22. OTHER NON-CURRENT LIABILITIESFinancial instrumentsDerivative financial instruments

Interest rate cross currency swaps (refer to note 26) 44 57

Current portion of interest rate cross currency swaps (15) (15)

29 42

Non financial instrumentsStraight lining of operating leases 91 51

Deferred income 138 86

Lessor contribution 115 59

Sun City Vacation Club 23 27

Accrual for farewell gifts 6 –

Long service award 82 222

Lease restoration provision 5 5

Post-retirement medical aid liability 99 109

Restraint of trade – 10

421 483


411 464

440 506

Straight lining of operating leasesLease payments relating to property are straight-lined over the term of the leases.

Deferred incomeDeferred income represents sales proceeds in respect of the second phase of Vacation Club units constructed at Sun City. This revenue is recognised over the 15-year period of the members’ contracts. Also included is lesser contributions received from a landlord. The revenue is recognised over 20 years and reduces the rental expense.

Restraint of tradeThis relates to the restraint of trade payment payable to a former executive director and was for a period of two years.

Post-retirement medical aid liabilityThe Group contributes towards the post-retirement medical aid contributions of eligible employees employed by the Group as at 30 June 2003. Employees who joined the Group after 1 July 2003 are not entitled to any co-payment subsidy from the Group upon retirement. Employees are eligible for such benefits on retirement based upon the number of completed years of service. The methods of accounting and valuation are similar to those used for defined benefit schemes. The actuarial valuation to determine the liability is performed annually.

Present value of unfunded obligations in the statements of financial position 99 109

The Group has no matched asset to fund the obligations. There are no unrecognised actuarial gains or losses and no unrecognised past service costs.



R million 2013 2012

22. OTHER NON-CURRENT LIABILITIES continuedPost-retirement medical aid liability continuedMovement in unfunded obligation:

Benefit obligation at beginning of year 109 91

Interest cost 9 8


Actuarial (gain)/loss (22) 8


Benefit obligation at end of year 99 109

The amounts recognised in the statement of comprehensive income are as follows:


Interest cost 9 8


Total (9) 20

The effect of a 1% increase relates to increasing the future rate of increase of the medical aid subsidy assumption from 5.31% per annum to 6.31% per annum and hence reducing the gap between the discount rate and the Company subsidy rate from 4.41% per annum to 3.41% per annum. The resultant increase in the liability is equal to R20.4 million, or 20.5% and the resultant increase in the total of the service and interest costs is R2.9 million, or 21.8%.

The effect of a 1% decrease relates to reducing the future rate of increase of the medical aid subsidy assumption from 5.31% per annum to 4.31% per annum and hence widening the gap between the discount rate and the Company subsidy rate from 4.41% per annum to 5.41% per annum. The resultant reduction in the liability is equal to R16.1 million, or 16.2% and the resultant reduction in the total of the service and interest costs is R2.3 million, or 17.1%.

The expected expense to be recognised in the statement of comprehensive income for the year ending 30 June 2014 is R13 million.

2013 2012

The principal actuarial assumptions used for accounting purposes were:


Price inflation allowed by Group 5.31% 4.89%

The average life expectancy in years of a member retiring at age 60 on the statement of financial position date and of a member retiring at age 60, 20 years after the statement of financial position date are as follows:

Male 19.4 19.4

Female 24.2 24.2

The present value of the post retirement medical aid obligation for the current and prior years is as follows:

2013 2012 2011 2010 2009

Present value of funded obligations (99) (109) (91) 75 84

Experience adjustment on plan obligations (22%) 7% 7% (25%) (18%)

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R million 2013 2012

22. OTHER NON-CURRENT LIABILITIES continuedLong service awardThe Group offers employees a long service award. Employees are eligible for such benefits based upon the number of completed years of service. The method of accounting and valuation are similar to those used for defined benefit schemes. The actuarial valuation to determine the liability is performed annually.

Movement in unfunded obligation:

Benefit obligation at beginning of year 222 167

Interest cost 19 15

Service cost 22 18


Part settlement payment (120) –

Gain on part settlement of liability (37) –


Benefit obligation at end of year 81 222



Interest cost 19 15

Gain on part settlement of liability (37) –


(1) 77



Salary inflation assumption 7.30% 7.25%

During the 2013 financial year, the Group settled the long service liability for non-bargaining unit employees for R120 million. A new long service policy is now applicable to these employees.

The effect of a 1% increase in the discount rate will have a resultant decrease in the liability of R5.2 million, and the resultant decrease in the total of the service and interest costs of R0.3 million.

The effect of a 1% decrease in the discount rate will have a resultant increase in the liability of R5.8 million, and the resultant increase in the total of the service and interest costs of R0.3 million.


The present value of the long service awards obligation for the current and prior years is as follows:

R million 2013 2012 2011 2010 2009

Present value of funded obligations (81) (222) (167) (156) (144)

Experience adjustment on plan obligations (6%) 20% (3%) – –



R million 2013 2012

22. OTHER NON-CURRENT LIABILITIES continuedFarewell gift liabilityThe Group offers a farewell gift to employees who are retiring or resigning. Employees are eligible for such based upon the number of completed years of service. The method of accounting and valuation are similar to those used for defined benefit schemes. The actuarial valuation to determine the liability is performed annually.

Movement in unfunded obligation:

Benefit obligation at beginning of year –Interest cost 1Actuarial loss 5

Benefit obligation at end of year 6


Current service cost

Interest cost 1Actuarial loss 5

Total 6


Discount rate 8.20%Salary inflation assumption 7.40%

The effect of a 1% increase in the discount rate will have a resultant decrease in the liability of R0.6 million, and the resultant decrease in the total of the service and interest costs of R0.1 million.

The effect of a 1% decrease in the discount rate will have a resultant increase in the liability of R0.7 million, and the resultant increase in the total of the service and interest costs of R0.1 million.


The present value of the farewell gift obligation for the current year is as follows:

R million 2013

Present value of funded obligations (6)Experience adjustment on plan obligations (83%)

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R million 2013 2012

23. ACCOUNTS PAYABLE AND ACCRUALSFinancial instrumentsTrade payables 209 217

Accrued expenses 699 630

Interest payable 10 6

Capital creditors 22 46

Current portion of interest rate cross currency swaps 15 15

Other payables 79 27

1 034 941

Non-financial instrumentsVAT 47 36

Employee related accruals 343 269

1 424 1 246

The fair value of all non derivative financial instruments approximates their carrying value.

24. PROVISIONSBalance at beginning of year:

Progressive jackpots 38 42

Ster Century guarantee 5 5

43 47

Created during the year:

Net progressive jackpots 146 166

Ster Century guarantee 3 –

149 166

Utilised during the year:

Net progressive jackpots (144) (170)

(144) (170)

Balance at end of year:

Progressive jackpots 40 38

Ster Century guarantee 8 5

48 43

Progressive jackpotsProvisions are made for the incremental portion of the progressive jackpots. The provision is calculated based on the readings of the progressive jackpot machines. The full provision is expected to be utilised within the next financial year.

Ster Century guaranteeThe provision relates to the Group’s share of a claim made by Heron City for €628 000 in respect of a guarantee given by RRHL and Primedia for the rental obligations of SCE cinemas in Spain that SCE sold to Cine Alcobendas (refer to note 27).



R million 2013 2012

25. CASH FLOW INFORMATION25.1 Cash generated by operations

Operating profit 1 896 1 710

Non cash items and items dealt with separately:

Depreciation and amortisation 851 818

Operating equipment usage 56 48

Derivative financial instruments (58) (76)

Employee share based payments 46 31

Pre-opening Maslow lease rentals 24 24

Foreign exchange profit 57 79

Long service award (release)/accrual (21) 55

Other non-cash movements 72 66

2 923 2 755

Delivery of share awards (11) (6)

Cash generated by operations before working capital changes 2 912 2 749

Working capital changes 168 (15)

Inventory (6) (4)

Accounts receivable 16 (146)

Accounts payable, accruals and provisions 158 135

3 080 2 734

25.2 Tax paidLiability at beginning of year (44) (76)

Current tax provided (refer to note 7) (471) (477)

CGT, STC and withholding taxes (refer to note 7) (26) (25)

Foreign exchange adjustments 15 3

Liability at end of year 28 44

(498) (531)

25.3 Purchase of shares in subsidiariesMonticello (73) –

RAH – (506)

SunWest – (295)

Worcester – (16)

(73) (817)

25.4 (Decrease)/increase in borrowingsIncrease in borrowings 20 1 476

Decrease in borrowings (725) (934)

Imputed interest (21) (15)

Increase in short-term banking facilities 657 62

(69) 589

25.5 Interest paidInterest expense (486) (521)

Imputed interest on loans payable 21 15

Fair value of derivative financial instruments 4 9

Non cash transfer from hedging reserve 2 2

(459) (495)

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R million 2013 2012

25. CASH FLOW INFORMATION continued25.6 Dividends paid

To shareholders (252) (199)To minorities in subsidiaries (282) (307)

(534) (506)

25.7 Cash and cash equivalentsCash at bank 837 601Cash floats 186 151

1 023 752

26. FINANCIAL INSTRUMENTSLiquidity riskLiquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group at all times maintains adequate committed credit facilities in order to meet all its commitments as and when they fall due. Repayment of borrowings are structured to match the expected cash flows from operations to which they relate.

The Group’s preference share funding is subject to debt covenants which are reviewed on an ongoing basis.

The following are the contractual undiscounted maturities of financial liabilities (including principal and interest payments) presented in Rand:

On demand ornot exceeding

6 months

More than6 months but

not exceeding1 year

More than1 year but

not exceeding2 years

More than2 years but

not exceeding5 years

More than5 years

2013Term facilities 457 154 296 907 132Minority shareholder loans 324 – – – –V&A loan 23 23 50 179 315Redeemable preference shares 69 69 921 1 191 –Lease liabilities 32 31 20 2 –Vacation Club members – – – – 99Short-term banking facilities* 95 2 454 – – –Derivative financial instruments 7 8 12 8 –Trade payables 209 – – – –Accrued expenses 699 – – – –Interest payable 10 – – – –Capital creditors 22 – – – –Other payables 79 – – – –

2 026 2 739 1 299 2 287 546

2012Term facilities 359 99 481 743 295Minority shareholder loans 377 – – – –V&A loan 21 21 46 164 379Redeemable preference shares 96 95 191 2 971 –Lease liabilities 28 21 45 10 –Vacation Club members – – – – 99Short-term banking facilities* 80 1 812 – – –Derivative financial instruments 19 15 23 26 –Trade payables 217 – – – –Accrued expenses 630 – – – –Interest payable 6 – – – –Capital creditors 46 – – – –Other payables 27 – – – –

1 906 2 063 786 3 914 773

* These are 364 day notice facilities. As at date of this report no notice on any of these facilities had been received.



26. FINANCIAL INSTRUMENTS continuedAll derivative financial instruments are classified as level 2 financial instruments.

Credit riskCredit risk arises from loans and receivables, accounts receivable (excluding prepayments and VAT), and cash and cash equivalents. Trade debtors consist mainly of large tour operators. The granting of credit is controlled by application and account limits. Cash investments are only placed with high quality financial institutions.

The maximum exposure to credit risk is represented by the carrying amount of all financial assets determined to be exposed to credit risk, with the exception of financial guarantees granted by the Group for which the maximum exposure to credit risk is the maximum amount the Group would have to pay if the guarantees are called on (refer to note 27).

The Group has no significant concentrations of credit risk with respect to trade receivables due to a widely dispersed customer base. Credit risk with respect to loans and receivables is disclosed in note 14.

Market riskMarket risk includes foreign currency risk, interest rate risk and other price risk. The Group’s exposure to other price risk is limited as the Group does not have material investments which are subject to changes in equity prices.

(a) Foreign currency riskThe Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to US Dollar, Sterling, Botswana Pula, Chilean Peso, Nigerian Naira and Zambian Kwacha.

The Group manages its foreign currency risk by ensuring that the net foreign currency exposure remains within acceptable levels. Companies in the Group use foreign exchange contracts (FECs) and interest rate cross currency swaps to hedge certain of their exposures to foreign currency risk. The Group had two material FECs outstanding at 30 June 2013 (2012: three) with a fair value of R32 million (2012: R25 million). The notional amount of the outstanding FECs at 30 June 2013 was R239 million (2012: R478 million). Refer to paragraph (b) for the interest rate cross currency swaps.

Included in the statements of financial position are the following amounts denominated in currencies other than the functional currency of the Group (Rand):

R million 2013 2012

Financial assetsUS Dollar 366 323

Sterling 28 22

Botswana Pula 80 69

Chilean Peso 246 47

Nigerian Naira 35 27

Euro 2 8

Zambia ZMW 30 –

Financial liabilitiesUS Dollar 726 289

Botswana Pula 12 11

Chilean Peso 251 735

Nigerian Naira 74 79

Zambia ZMW 29 –

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate in Rand due to changes in foreign exchange rates.

Foreign currency sensitivityA 10% strengthening in the Rand against foreign currencies at 30 June 2013 would decrease profit before tax by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

2013 2012

US Dollar 30 (9)

Sterling (1) –

A 10% weakening in the Rand against these currencies at 30 June 2013 would have an equal but opposite effect to the amounts shown on the next page, on the basis that all other variables remain constant.

A 10% strengthening in the Chilean Peso against the US Dollar at 30 June 2013 would decrease the profit before tax by the amount shown on the next page. This analysis assumes that all other variables, in particular interest rates and the Rand/Chilean Peso exchange rate, remain constant.

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26. FINANCIAL INSTRUMENTS continued

2013 2012

R millionProfit

before taxProfit

before tax

US Dollar (3) (7)

A 10% weakening in the Chilean Peso against the US Dollar at 30 June 2013 would have an equal but opposite effect to the amount shown above, on the basis that all other variables remain constant.

(b) Cash flow interest rate riskThe Group’s cash flow interest rate risk arises from cash and cash equivalents and variable rate borrowings. The Group is not exposed to fair value interest rate risk as the group does not have any fixed interest bearing financial instruments carried at fair value.

The Group manages interest rate risk by entering into short- and long-term debt instruments with a combination of fixed and variable interest rates. It also uses floating-to-fixed interest rate swaps and interest rate cross currency swaps to hedge its foreign currency and interest rate cash flow risk. At 30 June 2013, the following derivative financial instruments were in place:

SFIR interest ratecross currency swaps

Emfuleniinterest rate swaps

Notional amount US$41 million R300 million

Fixed rate

2015 swap 5.57%

2017 swap 5.97%

Fixed rate expiry date

2015 swap 30 September 2015

2017 swap 29 September 2017

Variable rate Linked to USD Libor Linked to quarterly Jibar

Fixed exchange rates (Chilean Pesos to US Dollar) 526 – 591 N/A

Fair value (liability)/asset at 30 June (R44 million) R4 million

Transfer of profit from hedging reserve to foreign exchange profits R2 million

Net profit on cash flow hedges R3 million

The period of when the cash flows are expected to occur and impact on profit and loss is the same as those set out for the derivatives in the maturity analysis.

The interest rate characteristics of new and refinanced debt instruments are restructured according to expected movements in interest rates (refer to note 21).

Interest rate sensitivityA 1% increase in interest rates at 30 June 2013 would decrease profit before tax by the amounts shown below. This analysis assumes that all other variables remain constant.

2013 2012

R millionProfit

before taxProfit

before tax

(34) (47)

A 1% decrease in interest rates at 30 June 2013 would have an equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant.

Capital risk managementThe Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide benefits for its stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust this capital structure, the Group may issue new shares, adjust the amount of dividends paid to shareholders, return capital to shareholders or buy back existing shares.

The board of directors monitors the level of capital, which the Group defines as total share capital, share premium, treasury shares and treasury share options.

There were no changes to the Group’s approach to capital management during the year.

The Group is not subject to externally imposed capital requirements.



27. CONTINGENT LIABILITIES(i) Group companies have guaranteed borrowing facilities of certain Group subsidiaries in which the Group has less than 100%

shareholding. The Group has therefore effectively underwritten the minorities’ share of these facilities in the amount of R612 million at 30 June 2013 (June 2012: R583 million).

Contingent liabilities which the Group has incurred in relation to its previous interest in associates:

(ii) The Group’s 73.3% held subsidiary, Royale Resorts Holding Limited (RRHL), together with Primedia Limited have jointly and severally guaranteed one (June 2012: two) operating lease of Ster Century Europe whose rental amounts to US$1.6 million (30 June 2012: US$2.9 million) annually. At 30 June 2013 the maximum exposure is US$7.7 million (30 June 2012: US$24.9 million).

R million 2013 2012

28. CAPITAL EXPENDITURE AND RENTAL COMMITMENTSCapital commitmentsContracted 183 625

Authorised by the directors but not contracted 1 259 1 021

1 442 1 646

To be spent in the forthcoming financial year 1 442 1 459

To be spent thereafter – 187

1 442 1 646

Future capital expenditure will be funded by a combination of internally generated cash flows and debt facilities.

Rental commitmentsThe Group has the following material rental agreements as at 30 June 2013:

(i) For the Group’s head office in Sandton, expiring on 31 May 2014, with an annual rental of R18.1 million, escalating at 11% per annum.

(ii) For the land upon which the Wild Coast Sun Resort is situated, expiring on 9 March 2029, at an annual rental of R0.1 million, escalating at 5% per annum. The Group has an option to renew the lease to March 2079. The rental payment would be negotiated and cannot increase by more than 15% based on the rental payable in March 2029.

(iii) For the land upon which the Flamingo casino complex is situated, expiring on 30 September 2096, with an annual rental of R0.1 million, plus contribution to the maintenance cost of the golf course.

(iv) For the Sands Hotel building, expiring on 30 June 2019, with an annual rental of R11.2 million, escalating at 8% per annum. The Group has the option to renew the lease to June 2029.

(v) For the Maslow Hotel building, expiring on 31 December 2031, with an annual rental of R22 million, escalating at 7% per annum.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

No later than 1 year 52 41

Later than 1 year and no later than 5 years 194 188

Later than 5 years 956 1 014

1 202 1 243

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29. RELATED PARTY TRANSACTIONSKey management personnel have been defined as: Sun International Limited board of directors and Sun International Management Limited board of directors. The definition of key management includes the close members of family of key management personnel and any entity over which key management exercises control. Close members of family are those family members who may be expected to influence, or be influenced by that individual in their dealings with the Group. They may include the individual’s domestic partner and children, the children of the individual’s domestic partner and dependants of the individual or the individual’s domestic partner.

R million 2013 2012

(i) Key management compensationNon-executive directorsFees 5 4

Executive directorsBasic remuneration 9 9

Bonuses/performance related payments 6 4

Retirement contributions 2 2

Other benefits 16 9

Fair value of options expensed 9 13

42 37

47 41

Other key managementBasic remuneration 25 24

Bonuses/performance related payments 18 13

Retirement contributions 4 4

Other benefits 3 3

Fair value of options expensed 16 11

66 55

Details of individual directors’ emoluments and share options are set out on pages 72 to 77 respectively of this report.

Share based compensation grantedShare option schemeAll share options and grants were awarded to key management on the same terms and conditions as those offered to other employees of the Group.

DirectorsNo share options were granted to the executive directors of the Group during 2013 (2012: nil). The number of share options held by executive directors at the end of the year was 14 063 (2012: 375 938).

Other key managementThe number of share options held by other key management at the end of the year was 106 907 (2012: 195 157).

Other share schemesMovement on share grants is set out below:

2013 2012

Executivemanagement

Other keymanagement Grant price

Executivemanagement

Other keymanagement

Averagegrant price

EGPOpening balance 209 338 641 144 281 466 557 136

Movement in employees 78 061 (78 061) 45 482 (19 662)

Exercised (47 670) (67 399) – –

Lapsed termination of employment (109 852) – (154 652) –

Lapsed vesting condition not met (20 208) (75 294) (8 305) (43 842)

Granted 12 099 – 89.46 45 347 147 512 90.07

Closing balance 121 768 420 390 209 338 641 144



29. RELATED PARTY TRANSACTIONS continued2013 2012

Executivemanagement

Other keymanagement Grant price

Executivemanagement

Other keymanagement

Averagegrant price

CSPOpening balance 137 805 475 146 224 634 470 310Movement in employees 80 469 (80 469) 45 439 (35 282)Lapsed termination of employment (92 377) – (137 989) –Lapsed vesting condition not met (29 030) (127 148) (44 309) (136 164)Granted – – 50 030 176 282 86.75

Closing balance 96 867 267 529 137 805 475 146

DBPOpening balance 16 839 32 904 51 267 42 296Movement in employees 6 293 (6 293) 1 300 (1 177)Matching Award (10 018) (14 357) (59 586) (17 749)Lapsed termination of employment (8 595) – – –Granted 12 734 17 326 85.47 23 858 9 534 80.93

Closing balance 17 253 29 580 16 839 32 904

RSPOpening balance 288 546 303 086 291 410 244 596Movement in employees 108 125 (108 125) 41 016 (41 016)Vested (101 126) (20 646) (158 213) (137 004)Lapsed termination of employment (138 647) – – –Granted 110 342 – 105.65 114 333 236 510 88.37

Closing balance 267 240 174 315 288 546 303 086

2013 2012

(ii) Shareholding of key managementPercentage holding by key managementSun International Limited 1.5 1.7Afrisun KZN 0.9 0.9National Casino Resort Manco Holdings 8.6 8.6Teemane 0.3 0.3

R’000 R’000Dividends received by key managementSun International Limited 1 863 1 126Afrisun KZN 2 056 1 314SunWest – 575National Casino Resort Manco Holdings 814 3 315Teemane 70 51

4 803 6 381

(iii) Other commercial transactions with related partiesInterest in timeshareCertain members of key management own timeshare at Sun City, which was acquired at market prices.

(iv) Other related party relationshipsManagement agreements are in place between SIML and various Group companies. A management fee is charged by SIML in respect of management services rendered.

The Group’s ownership of subsidiaries is set out online.

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30. INSURANCE CONTRACTSThe Group has a captive insurance company which underwrites a range of insurance risks on behalf of Group operating companies. On consolidation these insurance contracts are eliminated. The insurance captive purchases reinsurance cover for any individual loss exceeding R3 million. Amounts arising from these contracts are as follows:

2013 2012

Reinsurance premium costs (16) (17)

31. SHARE INCENTIVE SCHEMESAll share schemes are equity settled.

(i) Share option schemeMovements in the number of share options outstanding are as follows:

2013 2012

Numberof shares

Averageprice

Numberof shares

Averageprice

Movement during the yearBalance at beginning of year 1 503 833 48.68 1 959 154 46.88

Exercised (666 103) 49.24 (455 321) 40.93

Balance at end of year 837 730 48.24 1 503 833 48.68

Options held by Share Option TrustBalance at the beginning of year 12 188 44.89 1 685 857 51.02

Purchased from employees 666 103 49.24 455 321 40.93

Options exercised (642 290) 50.54 (2 053 988) 48.94

Options lapsed (2 500) 25.63 (75 002) 22.98

Balance at end of the year 33 501 42.89 12 188 44.89

871 231 48.04 1 516 021 48.65

Share options held by participants at the end of the year have the following terms:

Financial year of grant Financial year of lapseVested

optionsAverage price

R

2004 2014 339 628 36.80

2005 2015 492 477 55.83

2006 2016 5 625 74.00

Balance at 30 June 2013 837 730 48.24

Balance at 30 June 2012 1 503 833 48.68

Share options held by Share Option Trust at the end of the year have the following terms:

Financial year of grant Financial year of lapseOptions

heldAverage price

R

2004 2014 27 157 38.47

2005 2015 6 344 61.83

Balance at 30 June 2013 33 501 42.89

Balance at 30 June 2012 12 188 44.89

Share options are exercisable on the expiry of one year from the date of grant in cumulative tranches of 25% per annum and vest on retirement, retrenchment and death. Options lapse if not exercised within ten years of their date of grant. Options under the scheme were granted at prices ruling on the JSE Limited at the date of granting those options. No options were issued during the year.



31. SHARE INCENTIVE SCHEMES continued(ii) Conditional share plan

CSP awards provide senior executives with the opportunity to receive shares in Sun International Limited by way of a conditional award, which is subject to the fulfilment of predetermined performance conditions on the expiry of a three-year performance period. For awards made in 2009 and 2010 the performance condition is related to the Company’s total shareholder return (TSR) over a three-year period, relative to the TSR of constituents in the INDI 25 index and gambling/hotels sub-sectors of the travel and leisure sector that have a market capitalisation of greater than R1 billion. No awards vest if the Group’s TSR falls below the median TSR of the comparator group while all the awards vest if the group’s TSR falls within the upper quartile. Between the median and upper quartile the CSP awards vest linearly as the ranking of the Group’s TSR increases. For awards made in 2011 and 2012, 40% of the award is based on the performance condition related to the Company’s TSR over a three-year period as described above. In addition two new performance conditions were included as follows:

30% of the award is based on achieving AHEPS threshhold and on-target performance targets (refer to the remuneration report)

30% of the award is based on the Group achieving and maintaining a B-BBEE rating level of 4 or better as at December 2013 (refer to the remuneration report).

Movements in the number of share grants outstanding are as follows:

2013 2012

Numberof grants

Weightedaverage

grant priceR

Numberof grants

Weightedaverage

grant priceR

Balance at beginning of year 787 449 91.48 852 303 88.41

Lapsed – termination of employment (97 894) 86.66 (152 746) 83.64

Lapsed – performance condition not met (212 656) 84.12 (199 173) 77.25

Granted 15 826 89.46 287 065 86.55

Balance at end of year 492 725 88.00 787 449 91.48

Share grants outstanding at the end of the year vest on the following dates, subject to fulfilment of performance conditions:

Year ending on 30 June

2013 – – 241 978 84.12

2014 246 204 89.46 258 406 89.46

2015 246 521 86.55 287 065 86.55

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31. SHARE INCENTIVE SCHEMES continued(iii) Equity growth plan

EGP rights provide senior executives with the opportunity to receive shares in Sun International Limited through the grant of conditional EGP rights, which are rights to receive shares equal in value to the appreciation of the Sun International share price between the date on which the conditional EGP rights are granted and the date on which they are exercised, subject to the fulfilment of predetermined performance conditions over a specified performance period. The performance condition applied to the grants is that the Group’s adjusted headline earnings per share should increase by 2 percent per annum above inflation over a three-year performance period. If the performance condition is not met at the end of three years it is retested at the end of four and five years from the date of grant. From 2011, the awards are no longer re-tested at the end of years four and five. These awards lapse after the initial three-year period.

Movements in the number of share grants outstanding are as follows:

2013 2012

Numberof grants

Weightedaverage

grant priceR

Numberof grants

Weightedaverage

grant priceR

Balance at beginning of year 3 767 343 85.98 3 556 158 89.90

Lapsed – termination of employment (278 723) 86.73 (388 188) 91.13

Lapsed – performance condition not met (437 581) 90.47 (241 870) 149.55

Exercised (409 965) 82.74 – –

Granted 12 099 89.46 841 243 90.07

Balance at end of year 2 653 173 85.68 3 767 343 85.98

Exercisable at end of year 636 778 84.12 409 965 82.74

Share grants outstanding at the end of the year become exercisable on the following dates, subject to fulfilment of performance conditions:


2012 – – 1 509 016 82.89

2013 1 217 422 80.84 692 690 84.12

2014 676 610 89.46 724 394 89.46

2015 759 141 90.07 841 243 90.07



31. SHARE INCENTIVE SCHEMES continued(iv) Deferred bonus plan

DBP shares are Sun International Limited shares acquired by senior executives with a portion of their declared annual bonus and entitle the participant to receive a matching award (an equal number of Sun International Limited shares as acquired) at the end of a three-year period. The matching award is conditional on continued employment and the DBP shares being held by the participant at the end of the three-year period.

Movements in the number of matching awards outstanding are as follows:

2013 2012

Numberof grants

Weightedaverage

grant priceR

Numberof grants

Weightedaverage

grant priceR

Balance at beginning of year 88 559 88.86 143 118 91.57

Lapsed - termination of employment (22 030) 85.62 (7 968) 90.88

Granted 62 818 85.47 47 190 80.93

Matching awards (37 602) 91.49 (93 781) 88.83

91 745 86.23 88 559 88.86

DBP shares held at the end of the year entitle participants to matching awards on the following dates:


2013 – – 39 264 91.49

2014 15 451 97.04 17 823 97.04

2015 23 949 80.93 31 472 80.93

2016 52 345 85.47 – –

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31. SHARE INCENTIVE SCHEMES continued(v) Restricted share plan

RSP shares are Sun International Limited shares granted to key staff in return for continuing employment with the Group. The shares will be forfeited and any dividends received on the shares will be repayable should the employee leave the Group prior to the expiry of the vesting period. The vesting period is either three or five years. In the case of a three-year award, 100% of the shares awarded will vest after three years and in the case of the five-year award, 50% vests after three years, 25% after four years and the remaining 25% after five years.

Movement in the number of shares outstanding are as follows:

2013 2012

Numberof grants

Weightedaverage

grant priceR

Numberof grants

Weightedaverage

grant priceR

Balance at beginning of year 896 069 90.23 778,886 94.41

Granted during the year 126 595 103.54 583 227 87.94

Lapsed- termination of employment (98 803) 90.69 (2 175) 94.35

Vested during the year (153 825) 93.90 (463 869) 94.35

Balance at end of year 770 036 91.63 896 069 90.23

RSP share grants outstanding at the end of the year vest on the following dates, subject to fulfilment of employment conditions:


2013 – – 157 981 93.91

2014 131 046 95.50 154 861 95.32

2015 387 823 88.05 423 239 88.19

2016 133 710 94.90 79 997 83.62

2017 89 872 92.62 79 991 87.28

2018 27 585 105.65 – –

(vi) Valuation of share incentive grantsThe fair values of CSP and EGP options granted during the year were estimated using the binomial asset pricing model. For the DBP and RSP the share grants are valued based on the ruling share price on the date of the grant. The table below sets out the valuation thereof and the assumptions used to value the grants:

CSP EGP DBP RSP

2013Weighted average grant price R89.46 R89.46 R85.47 R103.54Weighted average 400-day volatility 23% 26% n/a n/aWeighted average long-term risk rate 4.80% 4.80% n/a n/aWeighted average dividend yield 3.80% 3.80% n/a n/aValuation R0.9 million R0.3 million R5 million R13 million

2012Weighted average grant price R86.55 R90.07 R80.93 R87.94

Weighted average 400-day volatility 17.6% 17.6% n/a n/a

Weighted average long-term risk rate 5.73% 6.27% n/a n/a

Weighted average dividend yield 3.01% 2.99% n/a n/a

Valuation R14 million R14 million R4 million R51 million

The employee share based payment expense for the year was R46 million (2012: R33 million).



32. EMPLOYEE SHARE TRUSTSThese trusts have been consolidated in the Group’s financial statements in terms of SIC 12 Consolidation – Special Purpose Entities. However, the trusts are controlled by their trustees. The majority of the trustees are representatives elected by and from the employees who are beneficiaries of the trust. The Company has no beneficial interest in and has no control over the trusts. The Group does not share in any economic benefits of the trusts.

Sun International Employee Share TrustThe Sun International Employee Share Trust was established to enable eligible employees to share in the success of the Group through share ownership. The share scheme excludes participants of any other Group share incentive scheme. Eligible employees will benefit from income and growth distributions made by the trust.

The trust is funded through interest free loans from the participating companies in the Group. These loans have been fair valued and imputed interest at 12% per annum is recognised over the expected loan period. Loans will be repaid through dividend flows and proceeds on the disposal of the underlying investments held by the trust.

The economic interest held by the trust in Group companies is set out below:

% 2013 2012Afrisun Gauteng 3.5 3.5Emfuleni Resorts 3.5 3.5SunWest 3.3 3.3Meropa 3.5 3.5Teemane 3.5 3.5Afrisun KZN 3.5 3.5Mangaung Sun 3.5 3.5Worcester 3.5 3.5Sun International Limited – direct 2.3 2.3 – indirect 2.5 2.6

Sun International Black Executive Management Trust (SIBEMT)As a further commitment to BEE and to assist Sun International in retaining black managerial staff, to attract new black talent and to contribute towards the creation of sustainable black leadership, a trust was formed for the benefit of current and future South African black management of the Group. Permanent employees of the Sun International Group, who occupy management grade levels, and are black South Africans are eligible to participate in the SIBEMT.

The economic interest held by the trust in the Company is set out below:Sun International Limited – indirect 0.4 0.4

33. TRANSACTIONS WITH MINORITIESIn November 2012, Chilean Enterprises exercised their option thereby taking up their unpaid share capital in SFI. This reduced SIL’s shareholding by 1.86% to 42.41%. In April 2013, IGGR and Lasud decided not to take up their options. Novosun took up these options by converting their loans into share capital. IGGR sold its shareholding in April 2013. The remaining shareholders took up these shares in proportion to their shareholding which resulted in SIL’s effective shareholding increasing to 44.21%.

a) Dilution in shareholding due to exercising of share options by minorityCarrying amount of non controlling interest diluted in November 2012 (18) –

Increase in NAV as a result of an increase in share capital in SFI 34 –

Increase in parent’s reserves 16 –

b) Acquisition of additional interest in subsidiaryCarrying amount of minority interest acquired 52 81

Consideration paid to minority interest (73) (817)

Increase in parent’s reserves (21) (736)

c) Effects of the transactions with minoritiesChanges in equity attributable to shareholders of the Group arising fromDilution in shareholding due to exercising of share options by minority 16 –

Acquisition of additional interest in subsidiary (21) (736)

Net effect in parent’s reserve (5) (736)

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34 SUBSEQUENT EVENTSThe following events have taken place since 30 June 2013:

(i) Real Africa Holdings Limited, a subsidiary of Sun International Limited, acquired WIP Gaming Proprietary Limited’s 23.2% interest in Afrisun Leisure Investments Proprietary Limited’s ordinary share capital for a cash consideration of R120 million. Following this acquisition Afrisun Leisure Investments Proprietary Limited became a wholly-owned subsidiary of Real Africa Holdings Limited.

(ii) The Group has submitted an application to the Gauteng Gambling Board to relocate its Morula casino licence from Mabopane to Menlyn, Tshwane in order to deliver the full potential of this licence to the City of Tshwane and the Gauteng Province. The public had until 16 August 2013 to submit objections to the application. A number of objections and concerns have been received from the public and are currently being addressed, whereafter the gambling board will make its decision.

If the application is approved the Group has plans to create a new R3 billion urban entertainment destination at Menlyn in Tshwane’s eastern suburbs. The development is part of a new large scale mixed-use “Green City” project which is currently under development, known as Menlyn Maine. This will, in its final form, be an R8 billion, 315 000 m² precinct, of which R825 million is either already built or under construction. It will comprise a new shopping mall, a high-end residential component, an office park, hotels and an entertainment node – which is the component that Sun International will provide, and which includes a 110 room 5-star hotel, 8 000 seat entertainment arena, convention and exhibition facility and a casino with 2 000 slots and 60 tables.

The Group has concluded an agreement to acquire the necessary land from the developers of Menlyn Maine under an option arrangement conditional upon receiving the required regulatory approvals. Approval has already been received for the necessary land rights, including all relevant zoning, environmental impact assessments and traffic impact studies have also been completed.

(iii) The Group’s application for a casino licence in Panama was awarded in September 2013. The Group is in the process of acquiring on a freehold basis, the casino component, the penthouse level (to be used as a Salon Privé), and certain apartments in the Trump Ocean Club International Hotel and Tower in Panama City, Panama for a purchase consideration of US$41 million.

On completion the casino will have approximately 600 slots and 32 tables allocated between the casino component located on the ground floor and the Privé overlooking the canal and the city. Both facilities will have entertainment and food and beverage offerings and will be developed at an approximate cost of US$64 million.

The casino is expected to open around September 2014.

(iv) The Group is in the process of applying for a casino licence in Colombia and has entered into a long-term lease for the casino component of a new-mixed use development in Cartagena, Colombia. The development will also include a 284 room 5-star InterContinental hotel, convention centre, shops, theatres, apartments and offices. The lease is conditional on the Group securing the casino licence and if awarded the Group will fit-out and equip the casino, which will have 310 slot machines and 16 tables, at a cost of US$30 million. This opportunity provides the Group with a low risk entry into the Colombian gaming market which presents a number of larger, exciting opportunities.

(v) The R30 million acquisition of Powerbet Gaming (Pty) Ltd, as announced on SENS in the Group’s third quarter trading update, is close to completion. The approval of the transaction by the Western Cape Gambling and Racing Board (WCGRB) has been received, however the Group is in discussion on certain conditions imposed by the WCGRB.


Accounting policies

The principal accounting policies adopted in preparation of these financial statements are set out below:

BASIS OF PREPARATIONAll policies stated in the consolidated financial statements relate to the Group and the companies within the Group. The consolidated financial statements for the year ended 30 June 2013 were prepared in accordance with International Financial Reporting Standards (IFRS), the SAICA Financial Reporting guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements (FRP) as issued by the Financial Reporting Standards Council (FRSC) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), effective at the time of preparing these financial statements and in compliance with the JSE Listings Requirements and the Companies Act of South Africa.

The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below. The policies used in preparing the financial statements are consistent with those of the previous year except as indicated in the paragraph on ‘Accounting policy developments’.

Preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. More detail on these estimates and assumptions are included under the policy dealing with ‘Critical accounting estimates and judgements’. Actual results may differ from those estimates.

GROUP ACCOUNTINGSubsidiariesSubsidiaries are those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than half of the voting rights or has de facto control over the operations. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s

share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the statement of comprehensive income.

The Group recognises any minority interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the minority’s proportionate share of the recognised amounts of the acquiree’s identifiable net assets.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

The Company accounts for subsidiary undertakings at cost.

Transactions with minority shareholdersMinority shareholders are treated as equity participants. Acquisitions and disposals of additional interests in the Group’s subsidiaries are accounted for as equity transactions and the excess of the purchase consideration over the carrying value of net assets acquired is recognised directly in equity. Profits and losses arising on transactions with minority shareholders where control is maintained subsequent to the disposal are recognised directly in equity. Any dilution gains or losses are also recognised directly in equity.

Special purpose entitiesSpecial purpose entities (SPEs) are those entities that are created to satisfy specific business needs of the Group, which has the right to obtain the majority of the benefits of the SPE and is exposed to the risk incident to the activities thereof. SPEs are consolidated in the same manner as subsidiaries when the substance of the relationship indicates that the SPE is controlled by the Group.

INTANGIBLE ASSETSGoodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Separately recognised goodwill is assessed for impairment on an annual basis or more frequently if events or changes in circumstances indicate a potential impairment. Goodwill is carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. The calculation of gains and losses on the disposal of an entity includes the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups of cash generating units that are expected to benefit from the business combination in which the goodwill arose.

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Other intangible assetsIndefinite life intangible assets are not amortised and are assessed annually for impairment.

Expenditure on leasehold premiums anticipated, successful gaming licence bids, computer software and acquired management contracts are capitalised and amortised using the straight line method as follows:

Leasehold premiums Lease period

Gaming licence bids Period of the licence and/or up to a maximum of 20 years

Management contracts Period of initial contract

Computer software 4 years

Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. However, costs that are directly associated with identifiable and unique software products controlled by the Company and which have probable economic benefits exceeding the costs beyond one year are recognised as intangible assets. Direct costs include staff costs of the software development team and an appropriate portion of the relevant overheads. Expenditure meeting the definition of an asset is recognised as a capital improvement and added to the original cost of the asset.

Bid costs on gaming licence bids are capitalised, when it is highly probable that the bid will be successful, and subsequently amortised using the straight-line method over their useful lives, but not exceeding 20 years. Intangible assets are not revalued.

FOREIGN CURRENCY TRANSLATIONItems included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in South African Rand which is the parent company’s functional and presentation currency and the Group’s presentation currency.

Transactions and balancesTransactions denominated in foreign currencies are translated at the rate of exchange ruling on the transaction date. Monetary items denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Gains or losses arising on translation are credited to or charged to the statements of comprehensive income.

Foreign entitiesThe financial statements of foreign entities that have a functional currency different from the presentation currency are translated into South African Rand as follows:

� Assets and liabilities, at exchange rates ruling at the last day of the reporting period

� Income, expenditure and cash flow items at weighted average exchange rates

� Premiums on transactions with minorities and fair value adjustments arising from the acquisition of a foreign entity are reported using the exchange rate at the date of the transaction.

All resulting exchange differences are reflected as part of other comprehensive income. On disposal, such translation differences are recognised in the statement of comprehensive income as part of the cumulative gain or loss on disposal.

PROPERTY, PLANT AND EQUIPMENTFreehold land is included at cost and not depreciated.

All other items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land) less the residual values over their useful life, using the straight-line method. The principal useful lives over which the assets are depreciated are as follows:

Freehold and leasehold buildings 15 to 50 years

Infrastructure 5 to 50 years

Plant and machinery 10 to 25 years

Equipment 4 to 15 years

Furniture and fittings 5 to 10 years

Vehicles 4 to 15 years

The assets’ residual values and useful lives are reviewed annually, and adjusted if appropriate, at each statement of financial position date.

Operating equipment (which includes uniforms, casino chips, kitchen utensils, crockery, cutlery and linen) is recognised as an expense based on usage. The period of usage depends on the nature of the operating equipment and varies between one to three years.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as the owned assets or, where shorter, the term of the relevant lease.

When the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

Costs arising subsequent to the acquisition of an asset are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is then derecognised. All other repairs and maintenance costs are charged to the statement of comprehensive income during the financial period in which they are incurred.

General and specific borrowing costs and certain direct costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use are added to the cost of those assets, until such a time as the assets are substantially ready for their intended use.


Accounting policies continued

All other borrowing costs are recognised in profit and loss in the period which they are incurred.

IMPAIRMENT OF NON-FINANCIAL ASSETSAssets that have an indefinite useful life are not subject to depreciation or amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting period.

PRE-OPENING EXPENDITUREPre-opening expenditure is charged directly against income and separately disclosed. These costs include all marketing, operating and training expenses incurred prior to the opening of a new hotel or casino development.

INVENTORYInventory comprises merchandise and consumables and is valued at the lower of cost and net realisable value on a first-in, first-out basis. Net realisable value is the estimated selling price in the ordinary course of business less any costs necessary to make the sale.

CASH AND CASH EQUIVALENTSCash and cash equivalents are carried in the statement of financial position at fair value. Cash and cash equivalents comprise cash on hand and deposits held on call with banks. In the statement of financial position and statement of cash flows bank overdrafts are included in borrowings.

TRADE RECEIVABLESTrade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment.

TRADE PAYABLESTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not they are presented as non-current liabilities.

Trade payables are recognised intially at fair value and subsequently measured at amortised cost using the effective interest method.

FINANCIAL INSTRUMENTSFinancial instruments carried at statement of financial position date include loans and receivables, accounts receivable, cash and cash equivalents, borrowings and accounts payable and accruals.

Financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition financial instruments are measured as described below.

The fair value of publicly traded derivatives is based on quoted market prices at the financial reporting date. The effective value of the interest rate cross currency swaps is calculated at the present value of the estimated future cash flows. The fair value of foreign exchange contracts is determined using forward exchange market rates at the financial reporting date. Appropriate market-related rates are used to fair value long-term borrowings. Other techniques, such as the discounted value of estimated future cash flows, are used to determine the fair value for the remaining financial instruments.

Financial assetsThe classification of financial assets depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. The financial assets carried at statement of financial position date are classified as ‘Loans and receivables’ and ‘Available-for-sale investments’.

All purchases and sales of financial assets are recognised on the trade date, which is the date that the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

The Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or a group of financial assets is impaired. A provision for impairment is established where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the loans or receivables. Significant financial difficulties of the counterparty, and default or delinquency in payments are considered indicators that the loan or receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. When a loan or receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited in the statement of comprehensive income.

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in fair value of a financial asset below its cost is considered an indicator that the asset is impaired. If any such evidence exists the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss) is recognised in the

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statement of comprehensive income. Impairment losses are not reversed through the statement of comprehensive income.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as non-current assets unless receipt is anticipated within 12 months in which case the amounts are included in current assets. The Group’s loans and receivables comprise ‘Loans and receivables’, ‘Accounts receivable’ (excluding VAT and prepayments) and ‘Cash and cash equivalents’.

Subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective interest method, less any impairment.

Available-for-sale investmentsAvailable-for-sale investments are financial assets specifically designated as available-for-sale or not classified in any other categories available under financial assets. These are included in non-current assets unless management has expressed the intention of holding the investment for less than 12 months from the statement of financial position date, in which case they are included in current assets.

Available-for-sale investments are carried at fair value. Unrealised gains and losses arising from changes in the fair value of available-for-sale investments are recognised in other comprehensive income in the period in which they arise. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in other comprehensive income are transferred to the statement of comprehensive income.

Subsequent to initial recognition, available-for-sale investments are carried at fair value, less any impairment.

IFRS 7 requires disclosure of the fair value measurements by level of the fair value measurements hierarchy:

� Quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1)

� Inputs other than quoted prices included with level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2)

� Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

Financial liabilitiesThe Group’s financial liabilities at statement of financial position date include ‘Borrowings’ and ‘Accounts payable and accruals’ (excluding VAT and employee-related payables). These financial liabilities are subsequently measured at amortised cost using the effective interest method. Financial liabilities are included in current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date.

Derivative financial instrumentsThe Group uses derivative financial instruments, primarily foreign exchange contracts, interest rate cross currency swaps and floating-to-fixed interest rate swaps to hedge its risks associated with foreign currency and interest rate fluctuations

relating to certain firm commitments and forecasted transactions. These derivatives are initially measured at fair value on the contract date, and are remeasured to fair value at subsequent reporting dates. The resulting gain or loss is recognised in profit or loss as it arises unless the derivative is designated and effective as a hedging instrument. The Group designates certain derivatives as either hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedges), hedges of highly probable forecast transactions, hedges of foreign currency risk of firm commitments (cash flow hedges) or hedges of net investments in foreign operations.

Cash flow hedgesChanges in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in other comprehensive income. The ineffective portion is recognised immediately in profit or loss in the respective line items. Amounts deferred to the hedging reserves are recognised through profit and loss in the same period in which the hedged item affects profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, for forecast transactions, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to profit or loss for the period.

CURRENT AND DEFERRED TAXThe tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, respectively.

Deferred tax is provided in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes.

Current tax and deferred tax are calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date.

Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised in the foreseeable future.

SECONDARY TAX ON COMPANIES/WITHHOLDING TAXSecondary tax on companies (STC) is provided in respect of dividends declared net of dividends received or receivable and is recognised as a tax charge for the year in which the dividend is declared. STC was abolished in April 2012 and the 15% withholding tax came into effect.

LEASESLeases of assets where the Company assumes substantially all the benefits and risks of ownership are classified as finance leases. Finance leases are capitalised at commencement and



are measured at the lower of the fair value of the leased asset and the present value of minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding lease obligations, net of finance charges, are included in borrowings. The interest element of the lease payment is charged to the statement of comprehensive income over the lease period. The assets acquired under finance leasing contracts are depreciated over the shorter of the useful life of the asset, or the lease period. Where a lease has an option to be renewed, the renewal period is considered when the period over which the asset will be depreciated is determined.

Leases of assets under which substantially all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of a penalty is recognised as an expense in the period in which termination takes place.

BORROWINGSBorrowings, inclusive of transaction costs, are recognised initially at fair value. Borrowings are subsequently stated at amortised cost using the effective interest rate method; any difference between proceeds and the redemption value is recognised in the statement of comprehensive income over the period of the borrowing using the effective interest rate method.

Preference shares, which are redeemable on a specific date or at the option of the shareholder or which carry non-discretionary dividend obligations, are classified as borrowings. The dividends on these preference shares are recognised in the statement of comprehensive income as interest expense.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date.

EMPLOYEE BENEFITSDefined benefit schemeThe Group operates a closed defined benefit pension scheme. The defined benefit pension scheme is funded through payments to a trustee-administered fund, determined by reference to periodic actuarial calculations. The defined benefit plan defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

The asset or liability, as applicable, recognised in the statement of financial position in respect of the defined benefit pension plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses, past service costs and any asset ceiling which may apply. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit

obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions and past service costs are recognised in profit and loss for the year.

Defined contribution schemeThe Group operates a number of defined contribution schemes. The defined contribution plans are provident funds under which the Group pays fixed contributions into separate entities. The contributions are recognised as an employee benefit expense when they are due.

Post-retirement medical aid contributionsThe Group provides limited post-retirement healthcare benefits to eligible employees. The entitlement to these benefits is usually conditional upon the employee remaining in service up to retirement age and the employee must have joined the Group before 30 June 2003. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans. Actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions are recognised in the statement of comprehensive income. These obligations are valued annually by independent qualified actuaries.

Share based paymentsThe Group operates equity settled, share based compensation plans. The fair value of the services received in exchange for awards made is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the grants, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of awards that are expected to become exercisable. At the end of each reporting period, the Group revises its estimates of the number of awards that are expected to vest. It recognises the impact of the revision of original estimates, if any, in the statement of comprehensive income, and a corresponding adjustment to equity over the remaining vesting period.

Long service awardsThe Group pays its employees a long service benefit after a five year period of continuous service. The benefit is paid in the month the employee reaches the milestone. The method of accounting and frequency of valuation are similar to those under the defined benefit schemes. The actuarial valuation to determine the liability is performed annually.

Farewell giftsThe Group pays for a farewell gift for employees, with a minimum of a ten-year service with the Group, who leave as a result of a voluntary resignation or retirement. The value of the gift is calculated on a formula based on years of service and monthly base rate and is subject to tax. The method of accounting and frequency of valuation are similar to those

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under the defined benefit schemes. The actuarial valuation to determine the liability is performed annually.

PROVISIONSProvisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation.

Provisions are made for the incremental portion of the progressive jackpots. The provision is calculated based on the readings of the progressive jackpot machines. The full provision is expected to be utilised within the next financial year.

SHARE CAPITALOrdinary shares are classified as equity. Redeemable preference shares which carry a non-discretionary dividend obligation, are classified as liabilities (see accounting policy for borrowings).

External costs directly attributable to the issue of new shares, other than in a business combination, are shown as a deduction from the proceeds, net of income taxes, in equity.

Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid including any directly attributable incremental costs apart from brokerage fees (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled, re-issued or disposed of. Where such shares are subsequently sold or re-issued, any consideration received, net of any attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

REVENUE RECOGNITIONRevenue comprises the fair value of the consideration received or receivable from the sale of goods and services in the ordinary course of the Group’s activities. Revenue is recognised when it is probable that the economic benefits associated with a transaction will flow to the Group and the amount of revenue, and associated costs incurred or to be incurred can be measured reliably.

Revenue includes net gaming win, hotel, entertainment and restaurant revenues, other fees, rental income and the invoiced value of goods and services sold less returns and allowances. Value Added Tax (VAT) and other taxes levied on casino winnings are included in revenue and treated as overhead expenses as these are borne by the Group and not by its customers. VAT on all other revenue transactions is considered to be a tax collected as an agent on behalf of the revenue authorities and is excluded from revenue.

Customer loyalty points are provided against revenue when points are earned.

The Company revenue also comprises dividend income which is recognised when the right to receive payment is established.

INTEREST INCOMEInterest income is recognised using the effective interest rate method.

DIVIDEND DISTRIBUTIONSDividend distributions to the Company’s shareholders are recognised as a liability in the Company’s financial statements in the period in which the dividends are declared.

SEGMENTAL REPORTINGOperating segments are reported in the manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the board of directors.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSEstimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Critical accounting estimates and assumptionsThe Group makes estimates and assumptions concerning the future. Actual results may differ from these estimates.

Asset useful lives and residual valuesProperty, plant and equipment are depreciated over its useful life taking into account residual values where appropriate. The actual useful lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re–assessing asset useful lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. The Group has not made any material adjustments to the useful lives and residual values in the past.

Impairment of assetsProperty, plant and equipment and intangible assets are considered for impairment if there is a reason to believe that impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic viability of the asset itself and where it is a component of a larger economic unit, the viability of that unit itself.

Future cash flows expected to be generated by the assets are projected, taking into account market conditions and the expected useful lives of the assets. The present value of these cash flows, determined using an appropriate discount rate, is compared to the current net asset value and, if lower, the assets are impaired to the present value. If the information to project future cash flows is not available or could not be reliably established, management uses the best alternative information available to estimate a possible impairment.



Post-retirement benefits, long service award and farewell giftsThe present value of the post-retirement benefit, long service award and farewell gift obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for post-retirement benefits, long service award and farewell gifts include the discount rate. Any changes in these assumptions will impact the carrying amount of post-retirement benefits, long service award and farewell gifts obligations.

Refer to note 22 for details.

The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the post-retirement benefit obligations. In determining the appropriate discount rate, the Group considers the interest rates of government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related post-retirement benefits, long service award and farewell gifts obligations.

Valuation of derivatives and other financial instrumentsThe valuation of derivatives and financial instruments is based on the market conditions at the statement of financial position date. The value of the instruments fluctuates on a daily basis and the actual amounts realised may differ materially from their value at the statement of financial position date.

Consolidation of subsidiaries and special purpose entitiesIn assessing investment relationships, management has applied its judgement in the assessment of whether the commercial and economic relationship is tantamount to de facto control. Based on the fact patterns and management’s judgement, if such control exists, the relationship of control has been recognised in terms of IAS 27 Consolidated and Separate Financial Statements and SIC 12 Special Purposes Entities.

Management is currently considering the effect of IFRS 10.

Pension fund assetManagement needed to assess whether or not the Group had an unconditional right to a refund in respect of the surplus from the pension plan. A legal interpretation was obtained which indicated that the Group does not have an unconditional right to the full refund of the surplus.

ACCOUNTING POLICY DEVELOPMENTSAccounting policy developments include new standards issued, amendments to standards, and interpretations issued on current standards. These developments resulted in the first time adoption of new and revised standards which require additional disclosures.

Standards, amendments and interpretations effective in 2013The following amendment became effective in 2013 but had no impact on the Group:

� Amendment to IAS 12,’Income taxes’ on deferred tax

The following amendment became effective in 2013 and has been adopted by the Group:

Amendments to IAS 1, ‘Presentation of Financial Statements’, on presentation of items of OCIThe IASB has issued an amendment to IAS 1, ‘Presentation of financial statements’. The main change resulting from these amendments is a requirement for entities to group items presented in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI.

Standards and amendments issued but not effective in 2013The Group has evaluated the effect of all new standards, amendments and interpretations that have been issued but which are not yet effective. Based on the evaluation, management does not expect these standards, amendments and interpretations to have a significant impact on the Group’s results and disclosures. The expected implications of applicable standards, amendments and interpretations are dealt with below.

Amendments to IAS 19, “Employee benefits”The IASB has issued an amendment to IAS 19, ‘Employee benefits’, which makes significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employee benefits.

Management is currently considering the effect of the change.

IFRS 9 Financial instruments (2009)This IFRS is part of the IASB’s project to replace IAS 39. IFRS 9 addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value.


IFRS 9 Financial instruments (2010)The IASB has updated IFRS 9, ‘Financial instruments’ to include guidance on financial liabilities and derecognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial instruments has been relocated from IAS 39, ‘Financial instruments: Recognition and measurement’, without change, except for financial liabilities that are designated at fair value through profit or loss.


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Amendments to IFRS 9 Financial instruments (2011)The IASB has published an amendment to IFRS 9, ‘Financial instruments’, that delays the effective date to annual periods beginning on or after 1 January 2015. The original effective date was for annual periods beginning on or after from 1 January 2013. This amendment is a result of the board extending its timeline for completing the remaining phases of its project to replace IAS 39 (for example, impairment and hedge accounting) beyond June 2011, as well as the delay in the insurance project. The amendment confirms the importance of allowing entities to apply the requirements of all the phases of the project to replace IAS 39 at the same time. The requirement to restate comparatives and the disclosures required on transition have also been modified.


IFRS 12 – Disclosures of interests in other entitiesThis standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.


IFRS 13 – Fair value measurementThis standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP.


Amendment to the transition requirements in IFRS 10, ‘Consolidated financial statements’, IFRS 11, ‘Joint arrangements’, and IFRS 12, ‘Disclosure of interests in other entities’The amendment clarifies that the date of initial application is the first day of the annual period in which IFRS 10 is adopted − for example, 1 January 2013 for a calendar-year entity that adopts IFRS 10 in 2013. Entities adopting IFRS 10 should assess control at the date of initial application; the treatment of comparative figures depends on this assessment. The amendment also requires certain comparative disclosures under IFRS 12 upon transition.


IFRS 10 – Consolidated financial statementsThis standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. The standard provides additional guidance to assist in determining control where this is difficult to assess. This new standard might impact the entities that a group consolidates as its subsidiaries.


IFRS 11 – Joint arrangementsThis standard provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. There are two types of joint arrangements: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed.


The following standard is not applicable to the Group:

� Amendments to IFRS 1 ‘First time adoption on government loans’

The following standards are not expected to have an impact on the Group:

� Amendment to IFRS 7 Financial instruments: Disclosures – asset and liability offsetting

� IAS 27 (revised 2011) – Separate financial statements � Amendments to IAS 32 – Financial instruments: Presentation � Amendments to IFRS 10, Consolidated financial statements’, IFRS 12 and IAS 27 for investment entities

� IAS 28 (revised 2011) – Associates and joint ventures.

Annual improvements projectImprovements to IFRSs were issued in May 2012 as part of the ‘annual improvements process’ resulting in the following amendments to standards issued, but not effective for 30 June 2013 year ends:

The following standards have been affected by the project:

� IFRS 1 ‘First-time adoption of International Financial Reporting Standards’

� IAS 1 ‘Presentation of financial statements’ � IAS 16 ‘Property, plant and equipment’ � IAS 32 ‘Financial instruments: Presentation’ � IAS 34 ‘Interim financial reporting.’

Management is currently considering whether any of these changes have an effect.

Sun International LimitedRegistration Number 1967/007528/06Share Code: SUIISIN: ZAE000097580(“Sun International” or “the Company”)

Notice is hereby given that the twenty-ninth annual general meeting of the shareholders of Sun International will be held on Friday, 22 November 2013 at 09:00, in the Zenith Conference Room at The Maslow Hotel on the corner of Grayston and Rivonia Road, Sandton, Johannesburg, Gauteng, to, among other things, consider, and if deemed fit, to pass (with or without modification) the ordinary and special resolutions set out below. The record date for determining which shareholders are entitled to: (i) receive notice of the annual general meeting is Friday, 18 October 2013; and (ii) participate in and vote at the annual general meeting is Friday, 15 November 2013, in terms of section 62(3)(a), as read with section 59 of the Companies Act, 2008 (Act 71 of 2008) as amended (Companies Act).

Kindly take note that all meeting participants will be required to provide reasonable satisfactory identification in the form of identity books, passports or driver licences, before being entitled to participate in the meeting.

PRESENTATION OF THE ANNUAL FINANCIAL STATEMENTSTo present the audited annual financial statements for the year ended 30 June 2013, together with the reports of: the directors; the external auditors; the audit committee; and the social and ethics committee. The annual financial statements are set out on pages 88 to 141 of this Integrated Annual Report.

1. Ordinary resolution number 1: Election of executive directorsTo elect by way of separate resolutions:1.1 Mr AM Leeming1.2 Mr GE Stephens

as executive directors, who retire in accordance with the provisions of article 39.9 of the provisions of the Company’s Memorandum of Incorporation, by virtue of their appointments being made pursuant to the last annual general meeting and accordingly are required to retire at this annual general meeting. Messrs Leeming and Stephens, being eligible, offer themselves for election. (Please refer to page 12 of this Integrated Annual Report for the résumés of Messrs Leeming and Stephens.)

In order for these resolutions to be adopted, the support of more than 50% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

2. Ordinary resolution number 2: Election of non-executive director

To elect:

2.1 Mr PDS Bacon as a non-executive director of the Company,

who retires in accordance with the provisions of article 39.9 of

the provisions of the Company’s Memorandum of Incorporation,

by virtue of his appointment being made pursuant to the last

annual general meeting and accordingly he is required to retire

at this annual general meeting. Mr Bacon being eligible, offers

himself for election. (Please refer to page 13 of this Integrated

Annual Report for a résumé of Mr Bacon.)

In order for this resolution to be adopted, the support of more than 50% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

3. Ordinary resolution number 3: Re-election of non-executive directorsTo re-elect by way of separate resolutions:

3.1 Mr PL Campher

3.2 Ms BLM Makgabo-Fiskerstrand

3.3 Mr IN Matthews

as directors, who retire by rotation at this annual general

meeting, in accordance with the provisions of article 39.3 of the

Company’s Memorandum of Incorporation. The directors, each

being eligible, offer themselves for re-election. (Please refer to

page 13 of this Integrated Annual Report for a résumé of each

non-executive director standing for re-election.)

In order for these resolutions to be adopted, the support of more than 50% of the voting rights exercised on the resolutions by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

4. Ordinary resolution number 4: Election of audit committee members

To elect, by way of separate resolutions, the following

independent, non-executive directors, as members of the

Company’s audit committee to hold such appointments as audit

committee members until the conclusion of the next annual

general meeting:

4.1 Ms ZBM Bassa

4.2 Mr PL Campher*

4.3 Ms B Modise

4.4 Mr GR Rosenthal

* Subject to his re-election as a director pursuant to ordinary resolution number 3


Notice of the Sun International annual general meeting

Résumés of the independent, non-executive directors nominated by the board and offering themselves for election as members of the audit committee are set out on page 13 of this Integrated Annual Report.

In order for these resolutions to be adopted, the support of more than 50% of the voting rights exercised on the resolutions by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

5. Ordinary resolution number 5: Remuneration policy

To consider and endorse, by way of a non-binding advisory vote, the Company’s remuneration policy as set out in the remuneration report on page 66 of this Integrated Annual Report.

Ordinary resolution number 5 is of an advisory nature and is non-binding. The failure to pass this resolution will not have any legal consequences on the Company, however, the board will address matters of concern, if any, that are raised by shareholders.

6. Ordinary resolution number 6: Re-appointment of independent external auditorsTo re-appoint PricewaterhouseCoopers Incorporated (PwC) as independent auditors of the Company, to hold office until the conclusion of the next annual general meeting, in accordance with the audit committee’s nomination.

It being noted that Mr ER Mackeown is the individual registered auditor and member of the aforegoing firm who undertakes the audit.


SPECIAL BUSINESS

7. Ordinary resolution number 7: Amendments to Sun International Limited Restricted Share PlanTo consider, and if deemed fit, to pass, with or without modification, the following ordinary resolution:

7.1 Resolved that the Sun International Limited Restricted Share Plan 2008 (RSP), as previously approved, be and is hereby amended to accommodate the following amendments:

7.1.1 the name of the RSP be amended to the Bonus Share Matching Plan (BSMP) and consequent amendments be made to the rules of the RSP in order to reflect the same;

7.1.2 a new rule 8.1.3 be inserted to read as follows:8.1.3 “All dividends that have been paid to the participant

by the Company in respect of the Forfeitable Shares,

as part of the BMSP annual allocation and that have

been forfeited as envisaged in Rule 8.1.1 are not required

to be repaid by the participant, subject to forfeiture

in the case of voluntary termination of employment.”

The amendments to the RSP have been approved by the

Johannesburg Stock Exchange Limited (JSE) and will be

initialled by the Chairman of the annual general meeting for

purposes of identification.

Copies of the amended RSP rules referred to in this ordinary

resolution number 7 are available for inspection at the

registered office of the Company from 15 October 2013 to

22 November 2013. In terms of the JSE Listings Requirements

this ordinary resolution number 7 must be passed by a 75%

majority of votes cast by shareholders present or represented

by proxy at the annual general meeting, excluding all votes

attached to shares in the Company owned and controlled by

existing participants of the RSP and that may be affected by

the proposed amendments.

Reason for and effect of ordinary resolution number 7 � The RSP was approved by shareholders at the Company’s

annual general meeting held in 2008. The purpose of the

RSP is to enhance the ability of the Company to attract and

retain key employees of the Company.

� The RSP, which provides for the award of forfeitable shares

which vest after three years subject to continued employment

on the part of the participant will now be used as the annual

share allocation award of the Company (instead of the

Company’s Conditional Share Plan and Deferred Bonus Plan).

� The rationale for revising the RSP is articulated in the

remuneration report on pages 69 to 71.

The RSP will now play a dual function and will be utilised

as follows:

� Award participants on an ad hoc basis for retention and

attraction (sign-on bonuses) purposes and upon termination

of employment before the vesting period (either 3-5 years)

the related dividends received by the participant must be

repaid to the Company; and

� Function as an annual share allocation award to participants

that are approved by the remuneration committee and upon

termination of employment before the vesting period, the

related dividends received by the participant may be

retained by the participant, as this is an entry level share plan.

In both instances above, participants will receive forfeitable

shares based on a portion of their bonus provided bonus

criteria are met.

In the event that shareholders do not approve the amendments

to the RSP, the Company will utilise the RSP as set out in the

remuneration report and participants that receive dividends as

part of their share allocation award in the normal course will

repay the related dividends upon termination of employment.

For the sake of clarity, it is re-iterated that dividends will be

repaid by the participants in the event that the forfeitable shares

were allocated on the basis of a retention or attraction award.

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8. Ordinary resolution number 8: Authority to implement amendments to Sun International Limited Restricted Share PlanTo consider and if deemed fit, to pass with or without

modification, the following ordinary resolution:

Resolved that the directors of the Company be and are hereby

authorised to do all such things as may be necessary for and

incidental to the implementation of ordinary resolution number 7

including, but not limited to, the signature of all related or

ancillary documents.

Reason for and effect of ordinary resolution number 8Ordinary resolutions numbers 7 and 8, if passed, will result in

the amendment of the existing RSP, details of which are

provided above, in ordinary resolution number 7.

9. Special resolution number 1: Financial assistance for the subscription of securities in terms of section 44 of the Companies ActTo consider and if deemed fit, to pass with or without

modification, the following special resolution:

Resolved that, to the extent required by the Companies Act, the

board of directors of the Company may, subject to compliance

with the requirements of the Company’s Memorandum of

Incorporation, the Companies Act and the JSE Listings

Requirements, each as presently constituted and as amended

from time to time, authorise the Company to provide direct or

indirect financial assistance by way of a loan, guarantee, the

provision of security or otherwise to:

(i) any bank registered in terms of the Banks Act, 1990 (including

any division, registered branch, including branch of a foreign

bank) and/or subsidiary of that bank; (ii) any of the Company’s

present or future subsidiaries; and/or (iii) any other company,

person, entity, trust or corporation that is or becomes related or

inter-related to the Company for the purpose of, or in

connection with the subscription of any securities issued or to

be issued by the Company or a related or inter-related company,

or for the purchase of any securities of the Company or a related

or inter-related company as contemplated in terms of section 44

of the Companies Act, for a period of two years from the date

on which this resolution is passed.

The reason and effect for special resolution number 1:The Company may be required from time to time and as and

when required to provide financial assistance to the above

recipients for the purpose of, or in connection with, the

subscription for any securities issued or to be issued by the

company or a related or inter-related company as contemplated

in section 44 of the Companies Act.

Section 44(3)(a)(ii) of the Companies Act requires that the

special resolution referred to in special resolution number 1

be adopted. In the circumstances and in order to, inter alia,

ensure that the Company’s subsidiaries and other related and

inter-related companies have access to financing and/or

financial backing from the Company (as opposed to banks), it is necessary to obtain the approval of shareholders, as set out in special resolution number 1. Therefore, the reason for, and effect of, special resolution number 1, is to permit the Company to provide direct or indirect financial assistance (within the meaning attributed to that term in section 44 of the Companies Act), to entities falling within any category or entities contemplated in special resolution number 1 above. It is noted that in addition to the requirement that special resolution number 1 be adopted, section 44 of the Companies Act further provides that the provision of financial assistance (within the meaning attributed to that term in section 44 of the Companies Act) may only be authorised by the board of directors of the Company if the board of directors of the Company is satisfied that (i) the terms under which the financial assistance is proposed to be assumed, are fair and reasonable to the Company; (ii) immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test and that (iii) the board must ensure that any conditions or restrictions in respect of the granting of financial assistance in the Company’s Memorandum of Incorporation have been satisfied.

In order for this resolution to be adopted, the support of at least 75% of the voting rights exercised on the resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

10. Special resolution number 2: Financial assistance to related or inter-related company in terms of section 45 of the Companies ActTo consider and if deemed fit, to pass with or without modification, the following special resolution:

Resolved that, to the extent required by the Companies Act, the board of directors of the Company may, subject to compliance with the requirements of the Company’s Memorandum of Incorporation, the Companies Act and the JSE Listings Requirements, each as presently constituted and as amended from time to time, authorise the Company to provide direct or indirect financial assistance in terms of section 45 of the Companies Act by way of loans, guarantees, the provision of security or otherwise, to any of its present or future subsidiaries and/or any other company or corporation that is or becomes related or inter-related (as defined in the Companies Act) to the Company for any purpose or in connection with any matter, such authority to endure for a period of two years from the date on which this resolution is passed.

Reason and effect for special resolution number 2:The Company may be required to provide loans, to and guarantee loans or other obligations to its subsidiaries and is not precluded from doing so in terms of its Memorandum of Incorporation and section 45 of the Companies Act.

This authority is necessary for the Company to continue to provide financial assistance in appropriate circumstances.


Notice of the annual general meeting continued

Under the Companies Act, the Company will, however, require the special resolution referred to above to be adopted, provided that the board of directors of the Company is satisfied that the terms under which the financial assistance is proposed to be given are fair and reasonable to the Company and, immediately after providing the financial assistance, the Company would satisfy the solvency and liquidity test contemplated in the Companies Act. In the circumstances and in order to, inter alia, ensure that the Company’s subsidiaries and other related and/or inter-related companies and corporations have access to financing and/or financial backing from the Company (as opposed to banks), it is necessary to obtain the approval of shareholders, as set out in special resolution number 2. Therefore, the reason for, and effect of, special resolution number 2, is to permit the Company to provide direct or indirect financial assistance (within the meaning attributed to that term in section 45 of the Companies Act), to the entities referred to in special resolution number 2 above.


11. Special resolution number 3: General authority to repurchase sharesTo consider and, if deemed fit, to pass, with or without modification, the following special resolution:

Resolved that the directors be and are hereby authorised to approve and implement the acquisition by the Company or by a subsidiary of the Company up to a maximum of 10% (ten percent) of the number of issued ordinary shares of the Company by way of a general authority, which shall only be valid until the Company’s next annual general meeting, unless it is then renewed, provided that it shall not extend beyond 15 (fifteen) months from the date of the passing of the special resolution, whichever period is the shorter, in terms of the Companies Act and the rules and requirements of the JSE which provide, inter alia, that the Company may only make a general repurchase of its ordinary shares subject to:

� the repurchase being implemented through the order book operated by the JSE trading system, without prior understanding or arrangement between the Company and the counterparty (reported trades are prohibited);

� the Company being authorised thereto by its Memorandum of Incorporation;

� repurchases not being made at a price greater than 10% (ten per cent) above the weighted average of the market value of the ordinary shares for the 5 (five) business days immediately preceding the date on which the repurchase was effected;

� an announcement being published as soon as the Company

has repurchased ordinary shares constituting, on a cumulative

basis, 3% (three percent) of the initial number of ordinary

shares, and for each 3% (three percent) in aggregate of the

initial number of ordinary shares repurchased thereafter,

containing full details of such repurchases;

� repurchases not exceeding 20% (twenty percent) in

aggregate of the Company’s issued ordinary share capital

in any one financial year;

� the passing of a resolution by the board of directors that it

has authorised the repurchase, that the Company and its

subsidiary/ies have passed the solvency and liquidity test

and that, since the test was performed, there have been no

material changes to the financial position of the Group;

� the Company’s sponsor confirming the adequacy of the

Company’s working capital for purposes of undertaking the

repurchase of ordinary shares in writing to the JSE before

entering the market to proceed with the repurchase;

� the Company and/or its subsidiaries not repurchasing

securities during a prohibited period as defined in paragraph

3.67 of the JSE Listings Requirements, unless it has in place

a repurchase programme where the dates and quantities of

securities to be traded during the relevant period are fixed

and full details of the programme have been disclosed in an

announcement published on the Securities Exchange News

Service (SENS) prior to the commencement of the prohibited

period;

� the number of shares purchased and held by a subsidiary

or subsidiaries of the Company shall not exceed 10%

(ten percent) in the aggregate of the number of issued shares

in the Company at the relevant times;

� any such general repurchases are subject to exchange

control regulations and approval, if applicable, at that point

in time; and

� the Company only appointing one agent to effect any

repurchases on its behalf.

Statement by directors

As at the date of this resolution, the Company’s directors

undertake that, having considered the effect of repurchasing

the maximum number of shares (as contemplated above), they

will not implement any such repurchase unless for a period of

12 months following the date of the general repurchase:

� the Company and the Group shall satisfy the solvency

and liquidity test in the manner contemplated by the

Companies Act;

� the Company and the Group will be able, in the ordinary

course of business, to pay its debts;

� the working capital of the Company and the Group will be

adequate for ordinary business purposes;

� the assets of the Company and the Group, fairly valued in

accordance with generally accepted accounting practice, will

exceed the liabilities of the Company and the Group; and

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� the Company’s and the Group’s ordinary share capital and reserves will be adequate for ordinary business purposes.

The following additional information, some of which may appear elsewhere in this Integrated Annual Report, is provided in terms of the JSE Listings Requirements for purposes of this general authority:

� directors – pages 12 and 13; � major beneficial shareholders – page 80; � directors’ interests in ordinary shares – page 89; and � share capital of the Company – page 110.

Litigation statement

The directors in office whose names appear on pages 12 and 13 of this Integrated Annual Report, are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past, being at least the previous 12 (twelve) months, a material effect on the Group’s financial position.

Director’s responsibility statement

The directors in office, whose names appear on pages 12 and 13 of this Integrated Annual Report, collectively and individually accept full responsibility for the accuracy of the information pertaining to this special resolution and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the special resolution contains all information required by law and the JSE Listings Requirements.

Material changes

Other than the facts and developments reported on in this Integrated Annual Report, there have been no material changes in the affairs or financial position of the Company and its subsidiaries since the date of signature of the audit report and up to the date of this notice.

Reason for and effect of special resolution number 3:The directors consider that such a general authority should be put in place should an opportunity present itself for the Company or a subsidiary thereof to purchase any of its shares during the year, which is in the best interests of the Company and its shareholders. The reason for and effect of special resolution number 3 is to grant the directors of the Company a general authority in terms of the Companies Act and the JSE Listings Requirements for the repurchase by the Company (or by a subsidiary of the Company) of the Company’s shares.


12. Ordinary resolution number 9: Authority for directors or company secretary to implement resolutionsTo consider, and if deemed fit to pass, with or without

modification, the following ordinary resolution:

Resolved as an ordinary resolution that any director of the

Company or the Company Secretary be and is hereby

authorised to do all such things and sign all such documents

as may be required to give effect to the ordinary and special

resolutions.


Statement in terms of section 62(3)(e) of the Companies Act:

Sun International shareholders holding certificated shares and

Sun International shareholders holding Sun International shares

in dematerialised form in “own name”:

� may attend and vote at the annual general meeting;

alternatively;

� may appoint an individual as a proxy, (who need not also be

a shareholder of Sun International) to attend, participate in,

speak and vote in your place at the annual general meeting

by completing the attached form of proxy and returning it to

the registered office of Sun International or to the transfer

secretaries, by no later than 09:00 on 20 November 2013.

Alternatively, the form of proxy may be handed to the

Chairman of the annual general meeting at the meeting

at any time prior to the commencement of the annual

general meeting. Please note that your proxy may

delegate his/her authority to act on your behalf to another

person, subject to the restrictions set out in the attached

form of proxy. Please also note that the attached form

of proxy must be delivered to the registered office of

Sun International or to the transfer secretaries or handed

to the Chairman of the annual general meeting, before your

proxy may exercise any of your rights as a Sun International

shareholder at the annual general meeting. Please note that

any shareholder of Sun International that is a company

may authorise any person to act as its representative at the

annual general meeting. Please also note that section 63(1)

of the Companies Act, requires that persons wishing to

participate in the annual general meeting (including the

aforementioned representative) must provide satisfactory

identification before they may so participate.


Notice of the annual general meeting continued

Notice to owners of dematerialised shares:

Please note that if you are the owner of dematerialised shares held through a CSDP or broker (or their nominee) and are not registered as an “own name” dematerialised shareholder then you are not a registered Sun International shareholder, but your CSDP or broker (or their nominee) would be. Accordingly, in these circumstances, subject to the mandate between yourself and your CSDP or broker as the case may be:

� if you wish to attend the annual general meeting you must contact your CSDP or broker, and obtain the relevant letter of representation from it; alternatively

� if you are unable to attend the annual general meeting but wish to be represented at the meeting, you must contact your CSDP or broker, and furnish it with your voting instructions in respect of the annual general meeting and/or request it to appoint a proxy. You must not complete the attached form of proxy. The instructions must be provided in accordance with the mandate between yourself and your CSDP or broker, within the time period required by your CSDP or broker. CSDPs, brokers or their nominees, as the case may be, recorded in Sun International’s sub-register as holders of dematerialised shares should, when authorised in terms of their mandate or instructed to do so by the owner on behalf of whom they hold dematerialised shares, vote by either appointing a duly authorised representative to attend and vote at the annual general meeting or by completing the attached form of proxy in accordance with the instructions thereon and returning it to the registered office of the Sun International or to the transfer secretaries, by no later than 09:00 on 20 November 2013. Alternatively, the form of proxy may be handed to the Chairman of the annual general meeting at any time prior to the commencement of the annual general meeting.

Voting at the meeting:

In order to more effectively record the votes and give effect to the intentions of shareholders, voting on all resolutions will be conducted by way of a poll.

Electronic participation in the annual general meeting:

Sun International intends to make provision for Sun International shareholders, or their proxies, to participate in the annual general meeting by way of electronic communication. In this regard, Sun International intends making a dial-in facility available that will be linked to the venue at which the annual general meeting will take place, on the date of, and from the time of commencement of, the annual general meeting. The dial-in facility will enable all persons to participate electronically in the annual general meeting in this manner and to communicate concurrently

with each other without an intermediary, and to participate reasonably effectively in the annual general meeting.

Shareholders wishing to participate electronically in the annual general meeting are required to deliver the attached “Electronic Notice” to Sun International’s registered address at 27 Fredman Drive, Sandown, Sandton, Gauteng, Republic of South Africa (marked for the attention of Ms CA Reddiar, Company Secretary) or email the Electronic Notice [email protected] by no later than18 November 2013 at 12:00 indicating that they wish to participate via electronic communication in the annual general meeting.

In order for the Electronic Notice to be valid it must contain: (a) if the shareholder is an individual, a certified copy of his identity document and/or passport; (b) if the shareholder is not an individual, a certified copy of a resolution or letter of representation by the relevant entity and a certified copy of his/her identity documents or passports of the persons who passed the relevant resolution. The authority resolution must set out who from the relevant entity is authorised to represent the entity at the annual general meeting via electronic communication; (c) a valid email address (the “Contact Details”).

By no later than 24 (twenty four) hours before the annual general meeting, Sun International shall use its reasonable endeavours to notify a shareholder at its Contact Address who has delivered a valid Electronic Notice of the relevant details through which the shareholder can participate via electronic communication. Should you wish to participate in the annual general meeting by way of electronic communication as aforesaid, you, or your proxy, will be required to dial-in on the date of the annual general meeting.

By order of the Board

CA ReddiarCompany Secretary

15 October 2013

Delivery addressComputershare Investor Services Proprietary LimitedPO Box 61051, Marshalltown 2107Gauteng, Republic of South Africa

Postal addressComputershare Investor Services Proprietary Limited

PO Box 61051, Marshalltown 2107

Gauteng, Republic of South Africa

147

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SUN INTERNATIONAL LIMITED (Incorporated in South Africa)(Registration number 1967/007528/06)Share code: SUIISIN: ZAE000097580(“Sun International” or “the Company”)

FORM OF PROXY – SUN INTERNATIONAL LIMITED ANNUAL GENERAL MEETINGFor use by certificated shareholders or own name dematerialised shareholders at the twenty ninth annual general meeting of shareholders of Sun International to be held in the Zenith Conference Room, The Maslow Hotel, corner of Grayston and Rivonia Roads, Sandton, Johannesburg, Gauteng on Friday, 22 November 2013 at 09:00.

This form of proxy is not to be used by beneficial owners of shares who have dematerialised their shares (dematerialised shares) through a Central Securities Depository Participant (CSDP) or broker, as the case may be, unless you are recorded on the sub-register as an own name dematerialised shareholder. Generally, you will not be an own name dematerialised shareholder unless you have specifically requested your CSDP to record you as the holder of the shares in your own name in the Company’s sub-register.

This form of proxy is only for use by certificated, own name dematerialised shareholders and CSDPs or brokers (or their nominees) registered in the Company’s sub-register as the holder of dematerialised shares.

Each shareholder entitled to attend and vote at the annual general meeting is entitled to appoint a proxy (who need not also be a shareholder of the Company) to attend, participate in and speak and vote in place of that shareholder at the annual general meeting, and at any adjournment thereafter.

Please note the following:

� the appointment of your proxy to exercise your rights may be suspended at any time to the extent that you choose to act directly and in person in the exercise of your rights as a shareholder at the annual general meeting;

� the appointment of the proxy is revocable; and

� you may revoke the proxy appointment by: (i) cancelling it in writing, or making a later inconsistent appointment of a proxy and/or (ii) delivering a copy of the revocation instrument to the proxy, and to the Company.

Any shareholder of the Company that itself is a company may authorise any person to act as its representative at the annual general meeting. Section 63(1) of the Companies Act requires that persons wishing to participate in the annual general meeting (including the aforementioned representative) must provide satisfactory identification before they may so participate.

Note that voting will be performed by way of a poll and, accordingly, any person who is present at the annual general meeting, whether as a shareholder or as proxy for a shareholder, shall have the number of votes determined in accordance with the voting rights associated with the Sun International ordinary shares held by that shareholder.

I/We (full names in block letters)

of (address)

Telephone: (work) (area code) Telephone: (home) (area code)

Fax: (area code) Mobile number:

being the holder(s) of ordinary shares in Sun International

hereby appoint (refer note 1)

1. or failing him/her;

2. or failing him/her;

3. the Chairman of the annual general meeting

as my/our proxy to attend, participate in and speak and vote at the annual general meeting in my/our place and on my/our behalf at the Sun International annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the ordinary and special resolutions to be proposed thereat and at any adjournment thereof and to vote for or against such resolutions or to abstain from voting in respect of the shares in the issued capital of the Company registered in my/our name/s, in accordance with the instructions set out below (refer to note 2):

my/our proxy:

� may delegate to another person his/her authority to act on my/our behalf at the Sun International annual general meeting, provided that my/our proxy may only delegate his/her authority to act on my/our behalf at the annual general meeting to a director of the Company;

� must provide written notification to the transfer secretaries of the Company, namely Computershare Investor Services Proprietary Limited, of the delegation by my/our proxy of his/her authority to act on my/our behalf at the Sun International annual general meeting by no later than 09:00 on 20 November 2013. Alternatively, the written notification must be handed to the Chairman of the annual general meeting at any time prior to the commencement of the annual general meeting to be held at 09:00 on 22 November 2013; and

� must provide to his/her delegate a copy of his/her authority to delegate his/her authority act on my/our behalf at the annual general meeting.Number of ordinary shares

Resolution reference For Against AbstainOrdinary resolution number 1 – election of executive directors1.1 Mr AM Leeming1.2 Mr GE StephensOrdinary resolution number 2 – election of non-executive director – Mr PDS BaconOrdinary resolution number 3 – re-election of non-executive directors3.1 Mr PL Campher3.2 Ms BLM Makgabo-Fiskerstrand3.3 Mr IN MatthewsOrdinary resolution number 4 – election of audit committee members4.1 Ms ZBM Bassa4.2 Mr PL Campher4.3 Ms B Modise4.4 Mr GR RosenthalOrdinary resolution number 5 – endorsement of remuneration policyOrdinary resolution number 6 – re-appointment of independent external auditorsOrdinary resolution 7 – amendments to Sun International Limited Restricted Share PlanOrdinary resolution 8 – authority to implement amendments to the Sun International Restricted Share PlanSpecial resolution number 1 – financial assistance in terms of Section 44 of the Companies ActSpecial resolution number 2 – financial assistance in terms of Section 45 of the Companies ActSpecial resolution number 3 – general authority to repurchase sharesOrdinary resolution number 9 – authority for directors or company secretary to implement resolutions

Signed this day of 2013

Signature of member(s)

Assisted by me (where applicable)

Please read the notes and instructions overleaf.Note: Voting on all resolutions will be conducted by way of a poll. On a poll a member is entitled to one vote for each ordinary share held. 149

INSTRUCTIONS ON SIGNING AND LODGING THE FORM OF PROXYA shareholder entitled to attend and vote at the annual general meeting may appoint one or more persons as his/her proxy to attend, speak or vote in his/her stead at the annual general meeting.

A proxy need not be a shareholder of the Company.

On a poll, every Sun International shareholder shall have for each share held by him/her that proportion of the total votes in the Company which the aggregate amount of the nominal value of that share held by him/her bears to the aggregate amount of the nominal value of all the shares issued by the Company.

Notes: 1. A shareholder may appoint and insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in

the space/s provided overleaf, with or without deleting “the Chairman of the annual general meeting”. The proxy or proxies need not be present at the annual general meeting and will be entitled to act as a proxy to the exclusion of those whose names follow.

2. If no proxy is inserted in the spaces provided, then the Chairman shall be deemed to be appointed as the proxy to vote or abstain as the Chairman deems fit.

3. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate box provided. If there is no clear indication as to the voting instructions to the proxy, this form of proxy will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit in respect of all the shareholder’s votes exercisable thereat.

4. A shareholder or his/her proxy is not obliged to use all the votes exercisable by the shareholder or by his/her proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or by his/her proxy.

5. Completed forms of proxy must be lodged at the registered office of the Company, 27 Fredman Drive, Sandown, Sandton, Gauteng, South Africa or posted to the Group company secretary, PO Box 782121, Sandton 2146, or lodged with or posted to the transfer secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107, South Africa) so as to be received by no later than 09:00 on Wednesday, 20 November 2013. Alternatively, the form of proxy must be handed to the Chairman of the annual general meeting at the general meeting at any time prior to the commencement of the annual general meeting to be held at 09:00 on Friday, 22 November 2013.

6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the Group company secretary or waived by the Chairman of the annual general meeting if the Chairman is reasonably satisfied that the right of the representative to participate and vote has been reasonably verified. CSDPs or brokers registered in the Company’s sub-register voting on instructions from beneficial owners of shares registered in the Company’s sub-register, are requested that they identify the beneficial owner in the sub-register on whose behalf they are voting and return a copy of the instruction from such owner to the Group company secretary or to the transfer secretaries, Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107, South Africa), together with this form of proxy.

7. The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so.

8. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies, but any such alteration or correction will only be validly made if it is accepted by the Chairman.

9. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by the Group company secretary.

10. If the instrument appointing the proxy or proxies has been delivered to the Company, any notice that is required by the Companies Act or the Company’s Memorandum of Incorporation to be delivered by the Company to the shareholder must (for so long as the proxy or proxies appointment remains in effect) be delivered by the Company to: (i) the shareholder or (ii) the proxy or proxies, if the shareholder has directed the Company to do so, in writing and paid any reasonable fee charged by the Company for doing so.

11. The authority of a person signing the form of proxy in a representative capacity must be attached to the form of proxy unless that authority has already been recorded by the Company’s transfer secretaries, alternatively waived by the Chairman of the annual general meeting.


Form of proxy continued

151

SUN INTERNATIONAL LIMITEDRegistration number 1967/007528/06Share code: SUIISIN: ZAE000097580

Shareholders or their duly appointed proxy(ies) (“participants”) who wish to participate in the annual general meeting via electronic communication, being via teleconference, must apply to the company secretary using this application form.

Participants are advised that they will not be able to vote during the meeting. Such participants, should they wish to have their vote counted at the meeting, must act in accordance with the general instructions contained on page 150 and vote on the proxy form.

Shareholders must take note of the following:

� A limited number of telecommunication lines will be available; � Each participant will be contacted by no later than 24 hours before the annual general meeting via email and/or SMS. Participants will be provided with a code and the relevant telephone number to allow them to dial-in; and

� The cut-off time for dialling-in on the day of the meeting will be at 08:50 on Friday, 22 November 2013 and no late dial-in will be possible.

Application form: electronic participationTo be returned to the Group company secretary (Ms Chantel Reddiar) situated at 27 Fredman Drive, Sandown, Sandton, Gauteng, Johannesburg or email [email protected] by no later than Monday, 18 November 2013 at 12:00.

Full name of shareholder

Identity number/Registration number of shareholder

Email address

Mobile number

Telephone number (including dialling code from South Africa and other countries where applicable)

Name of CSDP/broker (if shares are in dematerialised form)

Contact number of CSDP/broker

Contact person at CSDP/broker

Number of share certificate (if applicable)

Signature of shareholder

Date DD/MM/CCYY

Electronic notice to participate electronically in the annual general meeting

SUN INTERNATIONAL LIMITED(Incorporated in the Republic of South Africa)(Registration number: 1967/007528/06)(Share code: SUI) (ISIN: ZAE000070678)(“Sun International” or “the Company”)

To:The DirectorsSun International

I/We, the undersigned

(please print)

reference number:

(if available, please review the reference number listed on the envelope your Integrated Annual Report arrived in)

of address

Being the registered holder(s) of: ordinary shares in the capital of the Company

do hereby elect to receive any documents or notices from Sun International, by electronic post, to the extent that the Company is permitted to so distribute any notices, documents, records or statements in terms of the Companies Act, No 71 of 2008, as amended, and any and every other statute, ordinance, regulation or rule in force from time to time, including the JSE Listings Requirements, concerning companies and affecting Sun International.

I/We hereby furnish the following email address for such electronic communication:

Email address:

Any written amendment or withdrawal of any such notice of consent by me/us, shall only take effect if signed by me/us and received by the Company.

Signed at on 2013

Signature

Assisted by me (where applicable)

Please complete, detach and return this election form to Sun International’s transfer secretaries, Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) or by telefax to +27 (11) 370 5271


Election form

153

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Shareholders’ diary

ANNUAL GENERAL MEETING:Date: Friday, 22 November 2013Time: 09H00Venue: Zenith Conference Room, The Maslow Hotel, Corner of Grayston and Rivonia Roads, Sandton, Johannesburg, Gauteng.

Reports/Activity 2014

Announcement of interim results and interim dividend (if declared) for half year ending 31 December February

Quarterly business update – results for nine months to 31 March May

Financial year end 30 June

Announcement of reviewed annual results and final dividend (if declared) for the year ending 30 June August

Quarterly business update – results for three months to 30 September November

2014 Integrated Annual Report published October/November

Annual general meeting November


Afrisun Gauteng: Afrisun Gauteng Proprietary Limited

Afrisun KZN: Afrisun KZN Proprietary Limited

Afrisun KZN Manco: Afrisun KZN Manco Proprietary Limited

Afrisun Leisure: Afrisun Leisure Investments Proprietary Limited

AGM: Annual General Meeting

AHEPS: Adjusted headline earnings per share

B-BBEE: Broad-Based Black Economic Empowerment

B-BBEEA: Broad-Based Black Economic Empowerment Act No 53 of 2003

Boardwalk: The Boardwalk Casino and Entertainment World

Carousel: The Carousel Casino and Entertainment World

CASA: Casino Association of South Africa

CDP: Carbon Disclosure Project

CGU: Cash Generating Unit

Company: Sun International Limited

Companies Act: Companies Act no. 71 of 2008, as amended

CPA: Consumer Protection Act No 68 of 2008

CPI: Consumer Price Index

CRM: Customer Relationship Management

CSDP: Central Securities Depository Participant

CSP: Conditional Share Plan

DBP: Deferred Bonus Plan

DCF: Discounted Cash Flow

Dinokana: Dinokana Investments Proprietary Limited

EBS: Executive Bonus Scheme

EBT: Electronic Bingo Terminals

EGP: Equity Growth Plan

EGS: Enterprise Gaming Systems

ERP: Enterprise Resource Planning

Emfuleni Resorts: Emfuleni Resorts Proprietary Limited

Employee Share Trusts: Sun International Employee Share Trust and Sun International Black Executive Management Trust

Employment Equity Act: Employment Act No 53 of 2003

EVA: Economic Value Added

FICA: Financial Intelligence Centre Act no. 38 of 2009, as amended

Gauteng Manco: Gauteng Casino Resort Manco Proprietary Limited

GIA: Group internal audit

GRI: Global Reporting Initiative

Group: Sun International Group

HEPS: Headline earnings per share

HR: Human resources

IFRS: International Financial Reporting Standards

IGT: International Game Technology Africa Proprietary Limited

IT: Information technology

JSE: Johannesburg Stock Exchange Limited

King III/King III principles: King Report on Governance for SA and King Code of Governance Principles for South Africa 2009

LATAM: Latin American

LID: Lead Independent Director

LPMs: Limited payout machines

LTI: Long-term incentive

Mangaung Manco: Mangaung Casino Resort Manco Proprietary Limited

Mangaung Sun: Mangaung Sun Proprietary Limited

Meropa: Meropa Leisure and Entertainment Proprietary Limited

Meropa Manco: Meropa Casino Resort Manco Proprietary Limited

NAV: Net asset value

NRGP: National Responsible Gambling Programme

Own: Ownership

PAYE: Pay As You Earn

PDI: Previously disadvantaged individuals

PPE: Property, plant and equipment

RAH: Real Africa Holdings Limited

RSP: Restricted Share Plan

SCE: Ster Century Europe Limited

SCME: Ster Century Middle East Holdings Limited

SENS: Security Exchange News Service

SFIR: SFI Resorts S.A. (Monticello)

SIBEMT: Sun International Black Executive Management Trust

SIEST: Sun International Employee Share Trust

SIL: Sun International Limited

SIML: Sun International Management Limited

SISA: Sun International (South Africa) Limited

SRI Index: Socially Responsible Investment Index

STI: Short-term incentive

Sun International Investments No. 2: Sun International Investments No. 2 Limited

SunWest: SunWest International Proprietary Limited

TCN: Tourist Company of Nigeria Plc

TCOE: Total Cost of Employment

Teemane: Teemane Proprietary Limited

V&A: Victoria & Alfred Waterfront Proprietary Limited

VAT: Value Added Tax

Wild Coast Sun: Transkei Sun International Limited

Worcester: Worcester Casino Proprietary Limited

WWF: World Wide Fund for Nature South Africa

Abbreviations

Forward looking statementsThis report may contain certain forward looking statements which cannot be construed as either reported financial results nor other historical information. Such statements may include predictions of or indicate future earnings, objectives, savings, events, trends or plans based on current expectations, forecasts and assumptions.

As with any forward looking statement, prediction or forecast, there are inherently unexpected events which could cause uncertainty and unexpected change which have not, and could not, be accounted for.

Whereas the Company has made every effort to accurately and reasonably ensure the accuracy and completeness of the information contained within this Integrated Annual Report, any forward-looking statements speak only as at the date that they are made; the actual results may vary materially from those expressed or implied; and the Company undertakes no obligation to publically update or alter these or to release revisions after the date of publication of this report.

SUN INTERNATIONAL LIMITEDIncorporated in the Republic of South AfricaRegistration number: 1967/007528/06JSE Share Code: SUI ISIN: ZAE000097580

Company secretaryCA Reddiar BA, LLB, LLM, MBA

Telephone (+27) 11 780 7762 Telefax (+27) 11 780 7716

Public officerAM Leeming BCom, BAcc, CA(SA)

AuditorsPricewaterhouseCoopers Inc.

Principal bankersABSA Bank LimitedFirst National Bank LimitedNedbank Limited Rand Merchant Bank (a division of FirstRand Bank Limited)The Standard Bank of South Africa Limited

Corporate law advisors and attorneysCliffe Dekker Hofmeyr Inc.

Investor relationsTelephone (+27) 11 780 7762 Email: [email protected]

SponsorRand Merchant Bank (a division of FirstRand Bank Limited)

Registered office:27 Fredman Drive, Sandown, Sandton, 2196, Gauteng, Republic of South Africa

Telephone (+27) 11 780 7000 Telefax (+27) 11 780 7716

website: www.suninternational.com

Postal address:PO Box 782121, Sandton, 2146, Gauteng, Republic of South Africa

Transfer secretariesComputershare Investor Services Proprietary Limited70 Marshall Street, Johannesburg, 2001, Gauteng, Republic of South Africa

PO Box 61051, Marshalltown, 2107, Gauteng, Republic of South Africa

Telephone (+27) 11 370 5000Telefax (+27) 11 370 5271 Email: [email protected]

ADR depositaryNew YorkBNY Brokerage, Inc., 101 Barclay St. – Fl. 12W, New York, NY, 10286, USA Telephone (+1) 800 255 828

JohannesburgLauren Czepek, representative Telephone (+27) 11 217 7162 Email: [email protected]

Reservations and national sales:Telephone (+27) 11 780 7810

Administration

155


Notes

www.suninternational.com

27 Fredman DriveSandown Sandton 2196Republic of South Africa

PO Box 782121Sandton 2146 Gauteng

Republic of South Africa

Tel + 27 11 780 7000Fax +27 11 780 7716

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